Interim Aid in Germany: Which Companies May Apply for Financial Assistance?

Interim Aid in Germany: Which Companies May Apply for Financial Assistance?The German Federal Ministry of Economics is once again granting financial aid to small and mid-sized companies to mitigate the economic consequences of the corona pandemic. Companies can still apply for “Überbrückungshilfe II” until the end of the year. “Überbrückungshilfe III”, which follows and continues “Überbrückungshilfe II”, has also been approved.

Foreign companies are also entitled to apply, provided that they carry out their activities from a domestic permanent establishment or a domestic management headquarters and are registered for tax purposes with a German tax office. Nonprofit enterprises are also eligible to apply.

Affiliated companies only authorized to apply once

In this context, a company is defined as any legally independent entity. For example (but not only), subsidiaries of a parent company are non-independent. In the case of such an “affiliated company”, only the group of companies as a whole has the right to submit an application, and no more than once.

Assessment required in individual cases

Whether a company is considered “affiliated” is determined by the EU definition. According to this standard, several companies which “belong to the same natural person or to a group of natural persons acting jointly” are also affiliated, provided that they “operate wholly or partly in the same market or in factually adjacent markets“. Particular problems are posed by the concept of “the same or adjacent markets“, which in turn is governed by EU competition law and is highly case-specific.

Unclear legal situation creates uncertainty for applicants

It is therefore not always possible to determine when a company is considered “affiliated”. However, this question can be decisive for the economic survival of the company concerned. For example, it makes a tremendous difference whether a company that operates cinemas nationwide via eight independent limited liability companies can receive eight times EUR 150,000 or only a total of EUR 150,000 once. In our opinion, the authorities are in many cases wrong to consider these to be affiliated companies. Up to now, the justification for this has remained rather weak.

Our experienced lawyers help with applications for transitional relief

Drawing up a legal opinion and, if necessary, subsequent enforcement of the claim can provide legal clarity. A lot of money is at stake. We observe with concern that the authorities are increasingly initiating criminal proceedings for what they consider to be unjustified claims. This is another reason why prior consultation is important. Our attorneys will be happy to assist you in all questions concerning transitional relief and how to apply for it. Please feel free to contact us.

Continue reading:
Coronavirus: Applications For Aid Money And Short-Time Working in Germany Can Lead to Penalties!
Up to EUR 150,000 From The State: Apply for Bridging Grant in Germany Now!

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Stefan Winheller

Attorney Stefan Winheller has specialized in tax law for about 20 years, especially in the areas of cryptocurrencies, foundations/nonprofits and international tax law.

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