The application period for cost support started – remember these facts when filling in the application
The cost support application can be filled in starting from 7 July on the State Treasury website. We have gathered some important information to make the application process easier.
Suomen Yrittäjät held a webinar on cost support on 6 July. You can watch the webinar here (in Finnish only).
What are the conditions of eligibility for cost support?
- The company’s main sector is within the scope of cost support. Cost support is for sectors whose turnover has decreased by at least 10 per cent in April 2020. The Tax Administration provides a list of applicable business sectors to the State Treasury.
- The company’s turnover has decreased by more than 30 per cent from the comparison period.
- The company has payroll costs and fixed costs that are difficult to adjust. Fixed costs include renting expenses and other expenses for property, leases on equipment and goods, and access and license costs.
Support will not be granted, if the company’s turnover from the whole comparison period is less than 20,000 euros, or if the support to be paid would be less than 2,000 euros.
What if my business sector is not on the list?
If the company’s sector is not on the list, the law allows for the application of the support only on particularly serious grounds. If the company’s sector is not on the list, the company must provide arguments for why their company’s circumstances differ from the general circumstances of the sector, and how this is connected to the coronavirus in particular.
The grounds can be defined as particularly serious, when the company can point to restriction or regulation in public law, which has had a more considerable impact on the company’s turnover than the sector in general.
Is the turnover limit 20,000 euros?
Yes. The turnover limit applies to the entire comparison period. If the comparison period is from 1 March to 30 June 2019, the turnover for this four month period must be at least 20,000 euros. If the comparison period is January to February 2020, the turnover limit remains the same. It is, therefore, not a monthly limit.
The decrease in turnover is noted from value-added tax filings given to the Tax Administration, or, if these are not available, based on the company’s own statement.
How is the cost support calculated?
According to the law, the cost support granted to the company must be a minimum of 2,000 euros in order to be paid. The maximum amount of support is 500,000 euros per company. The amount is based on data of the company’s turnover from the comparison period and the support period, and the fixed costs and payroll costs from the support period as reported by the company. The April 2020 sales data, which is used to calculate the cost support, and the turnover data for the comparison period are primarily taken from the data provided by the Tax Administration to the State Treasury. The company employee payroll costs from the support period are provided to the State Treasury by the Incomes Register.
Support calculation formula:
Turnover from comparison period = The company’s May–June 2019 average sales. If the company has been started 1 March 2019 or later, the January-February 2020 sales average is used as the comparison period sales average.
Support period turnover = The company’s April 2020 turnover OR, if the company stipulates, the average monthly turnover during the support period from 1 April to 31 May 2020.
The fixed costs of the support period = The fixed costs as reported by the company during the support period (two months).
Payroll costs = The amount the company has paid in salaries during the support period (two months) according to the Incomes Register.
0.3 = The sales decline deductible is 30%.
What is the impact of the Business Finland exploratory funding, the support funding given by the ELY Centres and other support, on the amount of the general support?
Companies that have already received other direct support during the coronavirus pandemic can still apply for cost support. The support is integrated, i.e. any other direct support is deducted from the cost support. The restaurant sector support and the operating support for sole entrepreneurs awarded by municipalities are deducted in full, and 70 per cent of the development support granted by Business Finland and the ELY Centres is deducted.
If the company has not yet received, for example, the ELY Centre support, the cost support is integrated at a later date. If the company has received no other support when applying for cost support, they cannot be reported. The State Treasury will retroactively inspect any other cost support granted to the company.
Can a light entrepreneur apply for cost support? How about sole entrepreneurs?
Yes, they are applicable. Any unit practicing financial operations regardless of their legal form or method of finance is considered a company. Financial operations include any operations where goods and services are offered in certain markets. Light entrepreneurs and small companies should ensure, however, whether the cost support prerequisites are met; for example the minimum turnover of the comparison period (minimum of 20,000 euros).
Can I fill in the application, if I don’t have online banking ID’s?
The support application can also be filled in as a PDF, if the applicant is unable to sign into the online application solution. The PDF application can be ordered from the State Treasury via an address announced later.
How do I calculate the support sum to which my company is potentially entitled?
There is a calculator for this on the State Treasury website.
What is the impact of, for example, unpaid taxes on receiving the support?
Cost support is not granted to companies with unpaid taxes in debt recovery procedures (enforcement). The granted support is income subject to debt recovery procedures, to which the enforcement authorities are legally entitled.
Where can I find the application?
The application is available on the State Treasury website from 7 July.
What do I need to consider when filling in the application?
Remember to ensure the Tax Administration has the correct bank account number. The cost support can only be paid to an account on the Tax Administration register.
Anyone applying for support on behalf of a company must be authorized by the company. The application can only be filled in by a person with the authority to sign documents. This person may authorize another person to fill in the application by granting an authorization on the e-Authorizations page on the Suomi.fi service. Identification on the State Treasury application service is done similarly to the Tax Administration service.
If you wish to use May sales data to calculate the support, please ensure the VAT filing for the Tax Administration has been done before sending the cost support application (if the company’s tax period is one month). If the company files its taxes annually or quarter-annually, the monthly VAT sales data must be filled into the application manually.
The payroll costs are provided to the State Treasury by the Incomes Register. Fixed costs are itemised on the application by the month. The applicable cost types can be viewed on the drop-down menu. If the costs relate to activities subject to value-added tax, the costs are recorded without the value-added tax.
If the cost in question has a summary invoice for several months, the applicant must calculate the sum that applies for the support month in question.
A draft of the application can be saved. It can be edited later, if there is data that needs verifying. Please remember, that a company may submit only one application.
A verification email will be sent to the email address provided by the applicant. The email will contain a copy of the application and an ID that can be used to contact the State Treasury, if necessary. The State Treasury will request for further details from the company, if necessary, during the processing of the application.
The application and a supporting chat service are available from 7 July.
Can the application be supplemented?
The State Treasury will open an additional review service on 15 July, where the application can be edited or supplemented. For further instructions for applying , please refer to the State Treasury website.
Image: Getty Images
pauli.reinikainen (at) yrittajat.fi