The government has created a new support for companies: a quarter of the GPM is paid if the turnover falls by 30 percent.

The government has provided 150 million in direct subsidies to companies affected by COVID-19. The new support description was approved in a meeting Friday night. The amount of the aid is 500 euros at 25 percent of the GPM paid in 2019.

“We approved the concept some time ago, but we had to agree with the institutions and the EC, because we made some changes, taking into account the comments expressed by the business community,” said Minister of Economy and Innovation Aušrinė Armonaitė.

He assured that the first companies will be able to request support from next week.

“This measure is intended for small and medium-sized companies, but we have taken into account the criteria of the employee and we have eliminated it. This means that companies with more employees, for example with 267 employees, will still be able to apply, ”said A. Armonaitė.

However, representatives of traders are outraged by discrimination against local companies, as foreign-sourced companies are likely to be able to receive support, while local companies cannot always.

“When we saw the text of the document, we were a bit surprised, and I still want to believe that something went wrong,” said the surprised government Rūta Vainienė, president of the Lithuanian Trade Association.

How it works: You will get 25 percent. GPM

Support will be provided directly and indirectly to operators affected by quarantine restrictions.

Businesses whose 2019 turnover does not exceed LTL 50 million will be eligible for support. The book value of the assets is 43 million euros. euros. State and municipal owned businesses will not be eligible for assistance. Agricultural, fishing, aquaculture, credit and financial institutions will not be eligible.

“This definition of a company is based on the fact that the state’s financial resources are limited, so it is not possible to provide support to all those affected by the COVID-19 pandemic, it is necessary to identify the entities most in need,” said the Ministry of Economy and Innovation.

Businesses whose average monthly billing has decreased by 30 percent or more during a specified period will be eligible for support. The subsidy to companies will amount to a quarter (25 percent) of the personal income tax (PIT) paid or credited in 2019. If the PIT paid is small and amounts to less than € 2,000, a fixed grant of € 500.

The estimated period of revenue decline is from 2020. November 1 to 2021 January 31, 2019 compared to 2019-2020. the average monthly turnover for the relevant period.

If the company was recently established, after 2019. As of November 1, their income and PIT paid will not be assessed, but they will receive a fixed grant of 500 EUR.

To be eligible for a grant, businesses must have at least one employee on the application date and by 2020. By January 31, 2019, these businesses must have paid at least a portion of the 2019 tax. accumulated personal income.

Another limitation: if the company has previously actively used the support and its volume exceeded 800 thousand. euros. After all, according to the communication from the European Commission, the support provided to a company cannot exceed this amount.

We will share until the money runs out, or the term

The total amount allocated to companies is 150 million euros, which will be divided into two calls: 50 million euros. 100 million euros for autonomous companies and 100 million euros for in relation to other entities.

You will have to rush to request the support, because the distribution of the planned amount will expire. This support measure will be valid until June 1 at the latest.

“The calls would be suspended before the last day of the term established in the calls if the amount of grants awarded and the amount of grants requested allow the distribution of the total amount of funds assigned jointly to grant applications in accordance with the decisions grant from the Ministry and new grant applications. “

This time, the calls for support will be issued by the State Tax Inspectorate and the decisions will be made by the Minister of Economy and Innovation Aušrinė Armonaitė.

“Support will be provided to companies most affected by COVID-19 in terms of working capital (to preserve liquidity) and thus stimulate business activity,” the positive impact of the support is expected.

No reports, no support

Under the new description, those companies that have not submitted 2019 financial statements to the Records Center will not be eligible for support. If the applicant is related to other companies operating in Lithuania, he must also have submitted reports.

In addition, according to the description, companies that were in crisis before the pandemic will not receive subsidies, unless the company is very small and small and is not subject to insolvency proceedings, is not being restructured, etc.

Subsidies may need to be repaid

According to the description, the STI, upon receipt of the application from the company, will evaluate it immediately, no later than within 5 working days, and calculate the amount of the possible grant.

The STI will assess the revenue decline based on the forecast data declared in the app. However, later, if the presentation of VAT returns reveals that the decrease in income does not correspond to 30%. the grant must be repaid.

The STI can also apply a reasonableness check, to request an applicant who does not file VAT returns during a monthly period to provide additional data within 5 business days that corroborates the data provided in the application. If the applicant does not submit supporting data within the established period, the STI will not satisfy the request.

“This measure is based on trust in business. We believe and the authorities will believe in your drop in turnover, which you will indicate. However, both the STI and the Lithuanian Business Support Agency reserve the right to inspect before December 1 of this year. if they match the data you provided. And those whose billing has not dropped will have to repay that grant or part of it. However, it is a lot of money for our taxpayers, ”said A. Armonaitė.

Not everyone is happy: the greats want support too

The Lithuanian Business Enterprises Association (LPĮA), which groups business enterprises, issued a report ahead of the Government meeting, expressing the expectation that support will be provided to the largest enterprises, the largest employers, whose turnover or assets exceed the allowed limits.

“The quarantine has a direct impact on supply and demand, it affects companies and employees. The data shows that the financial difficulties experienced by large companies are no less than those experienced by small and medium-sized companies, ”says Rūta Vainienė, Director of LPĮA.

He noted that commercial companies could not claim part of the support during the first quarantine, such as rent compensation.

This time, groups of companies with Lithuanian capital are additionally removed from the planned subsidy measure. This generates different conditions of competition with companies linked to foreign capital, thus violating the constitutional principle of equal companies.

The LPIA does not have a level playing field for Lithuanian and foreign capital companies, and assesses that Lithuanian companies are discriminated against based on the origin of capital.

“Equally affected stores of the same size and turnover will receive or not the subsidy, depending only on whether they belong to a group of foreign or Lithuanian companies,” the report read.

It is noted that some small and medium-sized companies will also not be able to receive support for belonging to business groups.

The Ministry of Economy and Innovation announces that business rescue grants and soft loans should be released on January 18. According to the ministry, the first aid package should amount to 180 million. of which € 150 million will be allocated € 30 million for grants. EUR for loans.

Arguing that the commercial sector employs about 106 thousand. employees, the LPIA proposes to “significantly increase the intensity of support by setting more than 25%. of the amount of GPM paid in 2019 ”.

“I do not fully understand if we are talking, because an hour ago I went through the LVPA agency team every step and every table that companies will fill out when applying for this subsidy support”, A. Armonaitė was surprised by the arguments of the LPIAA.

According to her, in the second call, no one will discriminate against companies in global holding companies.

Vice Minister Vincas Jurgutis assured that during the first quarantines, subsidies were granted to micro-enterprises, and the current package for small and medium-sized enterprises was prepared, but the criterion of the number of employees was abandoned.

“If the related companies exceed 43 or 50 million euros, then no support is provided in this case,” said V. Jurgutis.

Prime Minister Ingrida Šimonytė proposed agreeing to approve the rules and then examine whether it is possible to reasonably exclude a company from the groups, if it is a small entity, so that it can request support.