Retail, travel, pyro industry: the next wishes will be fulfilled

Se travel industry employees have been busy canceling hotels and chasing the money on airline tickets that have already been paid for for months. With each lockdown extension, that unloved work is added that has nothing to do with the original job profile:

Instead of creating vacation pleasure, prevented vacation pleasure must be reversed. There is little that can be earned with it, but it still has to be done.

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Politicians now see it that way too. It now wants to “comprehensively” take into account the costs and lost sales that arise due to cancellations and cancellations, as stated in the first details of the latest corona resolutions by the federal and state governments.

As part of the improved bridging aid III, companies in the sector will for the first time also receive a flat-rate reimbursement of personnel costs and other costs incurred in the company due to cancellations. “That is a good sign,” said the German Travel Association (DRV).

“This is going in the right direction”

In addition to the travel industry, politicians also consider retailers and manufacturers of fireworks to be particularly affected by the corona restrictions. There are now special rules for them as well within the framework of bridging aid III, which now apply retrospectively for the period from November 2020 to June 2021; aid that runs in parallel such as November and December aid and bridging aid II are taken into account.

The federal and state governments are reacting to the sometimes massive complaints from the economy about the ever new lockdown measures and the criticism that the aid has so far not been received sufficiently or only hesitantly. Of the 600,000 applications with a volume of 9.4 billion euros, just 4.2 billion euros have been paid out so far, according to the latest figures from the Federal Ministry of Economics.

Source: WORLD infographic

In the retail sector, an initial reaction showed that they were basically satisfied with the improvements. “This is going in the right direction,” said Ralph Brügelmann, tax expert at the German Trade Association (HDE).

One of the greatest reliefs for retailers is that they no longer have to pay for so-called seasonal goods, which cannot be sold because the shops are still closed – or if they do, then only with a considerable loss of value.

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View of the building of the German Bundestag in Berlin, in front of which there are barriers.  Photo: Neundorf / Kirchner-Media

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“This applies to Christmas items, fireworks and winter clothing, for example,” it says in a paper from the Federal Ministry of Finance (BMF) on the website www.bundesfinanzministerium.de stands. It is also about perishable goods that can no longer be sold.

If the goods actually have to be completely written off because they are no longer edible or will no longer find a buyer next winter, the retailer can add the purchase price to those fixed costs that the state reimburses up to 90 percent. If a coat can still be sold in the next season, the depreciation of goods will be correspondingly lower and thus the reimbursement.

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Exterior view of the Federal Ministry of Finance, DEU, Berlin, March 22nd, 2020 ||  Minimum price 25 euros

The exact amount of the subsidy is graded according to the amount of the actual decline in sales. If sales drop by 30 to 50 percent, 40 percent of the eligible fixed costs will be reimbursed, if it is more than 70 percent, the 90 percent will be paid. In addition to goods that the retailer can no longer get rid of, the eligible fixed costs still include, for example, rents, leases and interest expenses.

“Drastically simplify bridging aid III”

A new addition to the funding catalog is that fixed costs are no longer only taken into account for renovation costs for hygiene measures, but also investments in digitization. This can be the creation of your own online shop or the entry costs to get rid of the goods on a large platform.

“Specifically, appropriate costs of up to 20,000 euros per month will be reimbursed that were incurred in the period from March 2020 to June 2021,” according to the BMF.

Due to the failed New Year’s Eve fireworks, the pyrotechnics industry can not only apply for funding for the months of March to December 2020, but also apply storage and transport costs for the period from December 2020 to June 2021.

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Although something is changing not only for the industries identified as particularly affected by politics. “We will drastically simplify bridging aid III and also add a shovel to the amount,” said Economics Minister Peter Altmaier (CDU).

Specifically, the maximum monthly funding amount will be increased to 1.5 million euros. In the future, larger companies with an annual turnover of up to 750 million euros can also submit applications. For everyone who is entitled to financial aid, the obligation to file for bankruptcy is to be extended until the end of April.

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It remains to be seen whether these measures will be sufficient. The retail association HDE is demanding one thing above all else: the retail sector affected by the lockdown loses an average of 600 million euros in sales on every closed sales day in January.

That is why quick help is urgently needed. HDE tax expert Brügelmann sees a need for clarification in the coming days. So far there is still a formulation according to which only those dealers who have not lost a single euro in 2019 can benefit from the extended aid. “This can happen quickly, especially in view of the low margins in retail,” said Brügelmann. A conversion of the store could be enough for this.

The travel association DRV criticizes the comparison period used for the reimbursement of lost commissions. 2020 as a reference does not bring the companies much, since they hardly had any business in the previous year.

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