Coronavirus : Economic measures taken by the French Government

April 20, 2020, Haywood Martin WISE law firm

The Covid-19 crisis, in addition to being a health crisis for the French population, is also having severe economic consequences, in particular for businesses, small shops, independent workers and merchants.

The isolation measures have a direct impact on several entreprises, business independants, artisans and merchants whose activity are currently shrinking or completely stopped.

To stem this economic collapse, the French Government took several measures to help the businesses deal with this exceptional situation.

In this article, we will deal with the most important measures. The measures are numerous and we suggest you contact our firm or your accountant to help you with you with the formalities or to give you additional information.

1°) POSTPONEMENTS OF SOCIAL SECURITY AND TAX PAYMENT DEADLINES (URSSAF, DIRECT TAXES)

• For businesses

Employers can change their payment terms on the basis of need : from 0  to the amount corresponding to a percentage of the social and tax payments due.

If the employer does not wish to opt to postpone payment of his social charges and prefers to pay them, he can schedule a payment plan for such payments. To do so, the employer can make the request on their online portal at urssaf.fr and explain their situation by email : « Nouveau message » / « Une formalité déclarative » / « Déclarer une situation exceptionnelle ».

•  For independent (liberal) professionals 

The standard monthly withholdings for March 20th and April 5th shall not be withdrawn. Subject to new measures to be decided upon, the amount of this withholding will be added to the future instalments (April to December).

 In addition to this measure, independent professionals may request:

 - granting of payment delays, without late penalties;

 - an adjustment of social charge installements to account for the reduction in revenues, based upon projections and without first filing the yearly statements;

 - government subsitites for partial or total cover of social charges or the granting of exceptional financial aid.

2°) GRANTING OF POSTPONEMENT ON PAYMENT OF RENTS AND UTILITIES  

Since the first days of the confinement, the government announced that the enterprises who are eligible for State subsidies may benefit from postponement of their rents and utilities.

-          Utilities bills : companies that have difficulties paying their utilities may send requests by mail or by phone to request delays to pay utilities (water, gas and electricity).

-          For rents on commercial leases : The principal renter’s syndicates requested, on March 20th, that their members suspend their rents for the month of April and for the periods concerned by the lockdown as established by executive order.

These measures shall be applied automatically for all companies whose activities have been suspended, such as the hotel-restaurant-tourist sector, for instance.

3°) BENEFITTING FROM TAX FREE SUBSIDIES FINANCED BY THE STATE AND THE REGIONS

The State and the regions have established a fund to provide subsidies to the small companies that are most affected by the crisis. Municipalities and large enterprises may contribute to the fund.

Wednesday, April 15, 2020, it was announced that the farmer members of an agricultural syndicate (GAEC), artists and authors, companies that are in restructuring or are in recovery proceedings may also benefit from that fund.

To receive the assistance for the month of March, all eligible companies may make a simple declaration on the website of the French tax administration - impots.gouv.fr – to receive a tax-free subsidies up to 1,500 euros for the month of March.

 To receive the subsidy for the month of April, from the 1st of May, all of the companies eligible, who suffered closing or a loss of turnover of more than 50% in April 2020 as compared to April 2019 or as compared to an average monthly turnover for 2019 may make a declaration to the tax office at - impots.gouv.fr – to receive the tax benefit of up to 1,500 euros for the month of April.  

To receive additional assistance, for enterprises that suffer the most, as of April 15th may request an additional assistance between 200 to 5000 euros, based upon the size and the financial situation of the company.

The French State has also implemented other measures that you can find at the following link : https://www.economie.gouv.fr/coronavirus-soutien-entreprises