The Fixed Expenditure Support System refers to certain businesses that are administratively closed or owned by the Department of Tourism under certain conditions.
Three unique schemes have been developed: the so-called “original”, “seasonal” and “team” fixed cost assistance.
The Order of March 24, 2021 and the Order of May 20, 2021 set the conditions.
A certificate from the Chartered Accountant or Auditor may be required. This is related to “fixed costs” EPIDTA and turnover.
Once the company has benefited from the assistance, a certificate of net conclusion must be issued by the auditor within one month of signing his statement on the accounts.
A new mandate deals with the amount of assistance and eligibility conditions for businesses created from 1 January 2019 to 31 January 2021. In these businesses, the application is filed from August 15 to September 30, 2021.
Operating from March 31, 2021, Bruno Le Myre and Alain Crisset are reactivating the system to support the fixed costs of the promised businesses.
It will complement the Solidarity Fund from January and February 2021 and reach 20 million by 2021 (calculated at the group level). 8 1.8 million caps will apply to companies created after January 1, 2019.
The aim is to go beyond gross operating losses (EPEs) and add finance charges and depreciation payments.
Some subsidiaries have access to this organization for groups that have reached the eligibility ceiling for the Solidarity Fund or the government assistance ceiling approved by the European Commission.
The ANC recommends that “fixed costs” assistance be recognized as an operational grant (Account 74) upon which the basic conditions for benefit have been met (ANC Recommendations Question J8).
To avail assistance for the months of May-June 2021 (Original Assistance), companies also submit their application:
- Within 45 days of payment of the Solidarity Fund for the month of June (eligible for June or two months);
- Until August 15, 2021 (eligible in May, but not in June).
Fixed cost support system: 4 conditions to benefit from
Initially, companies with more than 50 employees were intended to cover 70% of fixed costs and 90% of small firms.
Original assistance includes bi-monthly mesh and monthly mesh at the company’s discretion.
To benefit from the scale, companies must (general case):
- Qualified for the Solidarity Fund within one of the two months of the eligibility period;
- Experienced a revenue loss of at least 50% during the reference period compared to the same months of 2019;
- Created at least two years before the first day of the qualifying period;
- Negative total operating surplus during the qualifying period.
In the general case, the company must have been formed at least two years before the first day of the period (and January 1, 2019, for seasonal assistance), with revenues in excess of 1 million. At least two months of lawsuits (or 12 million in 2019). It should also be:
- Subject to a ban on allowing the public for at least one calendar month during the relevant bilateral period;
- Or carrying out retail activities and having at least one store in a shopping center subject to this restriction;
- Or perform its operation in the S1 or S1 biz fields;
- Or in retail (excluding automobiles and motorcycles) or residential real estate rental with its (main) function, located in a municipality in Appendix 3 of Order 3 of March 30, 2020
Except, for some companies with a turnover of less than 1 million and a high fixed cost, this measure applies without a minimum turnover criterion. Related Companies Small companies in the following fields:
- Managing indoor sports facilities and functioning of physical culture centers (sports halls);
- Other recreational and leisure activities in indoor rooms (discotheques);
- Management of botanical and zoological gardens;
- Water treatment companies;
- Activities of amusement parks and theme parks.
The following 3 sectors are concerned about the minimum turnover level when settling in a listed municipality Appendix 3 of the March 30, 2020 Order :
- Traditional catering;
- Hotel and similar accommodation;
- Tourist accommodation and other short term accommodation.
The difference in turnover for the month of turnover and the same month of 2019 to be taken into account. Two months will be added to recover the two-month turnover loss.
Special conditions apply to companies created after January 1, 2019. For example, for companies created before April 30, 2019, the eligibility period may be January 1, 2021 to April 30, 2021. Depending on the date of creation, the loss of revenue will not be estimated in the same way (compared to the months in 2019, 2020 or 2021).
EPITDA Turnover Calculation “Fixed Expenses”
Two new features are involved in calculating “fixed costs” EBITDA:
- Use of accounts 651 and 751;
- Taking into account the loss on the value of the shares by multiplying the shares by a depreciation rate at the end of the period, it is similar to that obtained from the accounts for the last closed financial year.
Total operating surplus is calculated as follows: Operating Revenue (Total I) – Operating Expenses (Total II) with:
Operating Income or Total I = Net Income (Accounts 70) + Operating Grants (Account 74, Including Solidarity Fund) + Royalties for Offers, Patents, Brands, etc. (Account 751).
Operating Expenses or Total II = Purchased Purchases (Accounts 60) + Other Purchases and External Payments (Accounts 61 and 62) + Taxes, Duties and Similar Payments (Accounts 63) + Wages, Salaries and Social Charges (Accounts 64) + Royalties for Offers Patents, brands, etc. (No. 651).
The implemented calculation formula takes into account turnover and subsidies, consumption from third parties, staff costs, taxes and obligations.
The amount of assistance is obtained by the following formula for each eligible period:
(Fixed costs – EPE) * 70% (or 90% for small businesses).
Fixed cost support system: Process and certification from a chartered accountant or CAC
In order to cover 70% to 90% of the fixed costs to the State, the concerned company has to submit an accompanying claim (Public Case) :
- Notice of respect;
- A certificate from a chartered accountant or auditor;
- EPIDTA calculation;
- 2021 public balance and 2020 or 2019 balance (preferably one balance per month) for the qualifying period depending on the date the company was created for the reference period.
The solicitation must be made within 45 days of payment of the Solidarity Fund.
Assistance is provided twice and every two months.
Finally, at the end of the annual accounts, when the net result exceeds the EPE amount, specific information (or the auditor’s certificate) is sent to the DGFIP, which may then request a refund. This information is mandatory from DGFiP under the penalty of refunding all amounts collected.