COVID-19 and economic crisis, emergency measures

The economic crisis and COVID-19 involve the implementation of emergency measures. These measures help the most troubled companies to continue their activities. Following the announcement of a second containment by the President of the Republic on 28 October, new measures come into force. Economic measures, also aimed at reducing the economic crisis, symbol of the situation since the beginning of the year. Solidarity fund, partial activity, social charges or rents… Measures that meet the immediate needs of businesses and businesses.

Avoiding the economic crisis, supporting the recovery

The Recovery Plan and the new measures announced by the Government want to support the French economy, driven by businesses. Thus, an envelope of 100 billion euros covering the different segments of the economy, and direct aid to companies support the collective effort.

The solidarity fund supports businesses that are closed administratively, but also those that remain open. Businesses with less than 50 administratively closed employees will be able to receive monthly compensation for their lost sales (excluding distance sales activities) of up to 10,000 euros. They can also choose compensation of 20% of 2019 sales up to a maximum of 200,000 euros per month.

Bank loan helps business
The Loan Guaranteed by the State, insured by the banks with the support of the State.

For companies that have remained open, access to the solidarity fund is possible if there is a loss of at least 50% of turnover, up to 1,500 euros per month. This aid is renewed for November and December.

Any company eligible for the solidarity fund must declare itself on the website impots.gouv.fr from 4 December. She will receive her assistance within days of the declaration.

Regarding the partial activity and its evolution, you can see the details following the point of the DIRECCTE.

Exemption from payroll taxes, measures to help businesses

The exemption from payroll taxes is also part of the emergency measures to combat the economic crisis. As an employer for a company with less than 50 employees closed, a total exemption from employer social contributions excluding supplementary retirement… As well as assistance in the payment of social security contributions of 20% of the wage bill. As a self-employed person, the announcement of a flat-rate reduction in social security contributions completes the measures.

For companies with less than 250 employees in certain sectors who suffer a loss of activity of at least 50%, aid is also provided. This includes, for example, tourism, events, culture, sport, air transport, among others.

For an employer, a total exemption from employer social contributions excluding supplementary retirement is expected in the months of October to December. These are contributions due from September to November. In addition, it receives assistance in the payment of social security contributions of 20% of the wage bill. As a self-employed person, there is a flat-rate reduction in social security contributions.

On a simple prior online request on the USSRAF website, an employer can defer payroll taxes for the deadlines of 5 and 15 December 2020. This includes wage and employer contributions. Without a response from the USSRAF within 48 hours of the request, the latter is worth agreement.

Office company rent
Some companies no longer operate in their premises.

For the self-employed, personal social security contributions will not be deducted in December. The only exception for contracted health professionals. Thus, the monthly deadlines of December 5 and 20 are not deducted.

Government-guaranteed loan, rents, longer aid to counter the economic crisis

One of the flagship aids of the COVID-19 era is the State Guaranteed Loan (PGE). Originally scheduled until December 31, 2020, it now runs until June 30, 2021. A response to the second containment, which began on October 30, 2020. During this second containment, non-essential businesses closed, a difficult period for their cash flow.

To this end, the repayment of the EMP extends over an additional 1 to 5 years, with rates negotiated with French banks between 1 and 2.5%, including government guarantee for small and medium-sized enterprises.

For smaller companies (less than 10 employees) the PGE has participatory loans of up to 20,000 euros. They amount to up to 50,000 euros for companies with 10 to 49 employees. Finally, companies with more than 50 employees can obtain repayable advances and loans at capped bonus rates equivalent to 3 months of turnover.

All applications for an EMP are made to the Departmental Committees for the Review of Corporate Financing Problems (CODEFI). Executives who want advice can also contact 0 806 000 245.

Finally, with regard to rents,the Government is working on a finance bill for 2021. This project wants to propose a tax credit to encourage landlords to cancel part of the rents. Rents due by businesses that are administratively closed or very affected by the current situation.

The goal? Avoid the landlord from being confronted with a default. It also allows businesses to benefit from significantly reduced rents. In fact, some landlords are pledging to cancel the rents due in November. For example, for business backers with fewer than 250 employees, this translates into a tax credit of 50% of the sums abandoned.

Sources:

  1. You are a company, your business impacted by COVID-19, Support measures, Government document published on 27 November 2020
  2. Covid-19 – Economic Support Measures, Government FAQ published on 24 November 2020
  3. Business Info COVID-19, Business Economy.gouv Platform for Business
Abonnez-vous à la Newsletter