Austria plans investment subsidy, tax breaks for coronavirus-hit firms

Austria plans extra investment subsidies and tax breaks to help companies hit by the coronavirus pandemic, Economy Minister Margarete Schramboeck said on Sunday.

Austria plans extra investment subsidies and tax breaks to help companies hit by the coronavirus pandemic, Economy Minister Margarete Schramboeck said on Sunday. Companies that commit to investments in the next six months could get 14% of it back as a subsidy, she told broadcaster ORF ahead of a two-day cabinet meeting on more stimulus measures.

This could comprise a basic subsidy of 7% and additional support for spending on things like digitalisation, the life sciences and health care, she said, adding a 20% subsidy in cash would be "ideal". Leaders of the conservative-Greens coalition said on Saturday they plan one-off payments to jobless people and more help for families with children.

The Oesterreich newspaper said the measures were worth 2.6 billion euros ($2.9 billion), on top of the aid package of up to 38 billion euros the government announced in May. Schramboeck said firms should get an extra six months of aid to cover fixed costs and be allowed to offset losses they incur this year against profits over the past two years to win rebates.

The government said on Friday that Austria, which has had more than 17,000 confirmed coronavirus cases and 677 reported deaths, plans to cut value-added tax for restaurants and the culture sector to 5% until the end of the year to help them cope. Austrian economic output will shrink by 7.2% this year if there is no second coronavirus wave in the autumn, but even a milder resurgence would deepen that to 9.2%, the country's central bank estimates. ($1 = 0.8886 euros)