Author: Dr. Philipp A.H. Simon, Attorney-at-Law (Luxemburg & Germany), Barrister, Luxembourg Luxembourg.
Firm: M&S Law S.à r.l., │ T: +352 28 80 18 │ F: +352 28 80 18 9 │ M: firstname.lastname@example.org
Adress: 205, Route d'Arlon │ 1150 Luxembourg
Overview of legal measures as of 4 April 2020, 19:00 CET as response to the Coronavirus. Please note: Due to the extraordinary situation, the legislation is in continuous evolution and may change very fast.
Due to the measures related to the Coronavirus COVID-19, the Luxembourg Government has taken a number of measures in order to support companies and their employees and thus avoid the notification of redundancies:
1. INTERVENTIONS AND RESTRICTIONS
1.1 Legal basis
As more and more cases have appeared in Europe and Luxembourg and as it has become clear that it is impossible to keep the virus from spreading throughout the general population, the control strategy has been adapted. The strategy does not rely on formal preventive quarantine measures anymore, but instead focuses on isolation, auto-isolation and auto-quarantine. A policy of risk mitigation through confinement has been put in place by the Grand Ducal Regulation of 18 March 2020 with a strong emphasis on the protection of fragile populations at risk of severe complications. Source: https://msan.gouvernement.lu
a) German frontier workers: The German Government has decided to tighten controls at the border between the Grand Duchy of Luxembourg and the Federal Republic of Germany. Only frontier workers who can prove the need to cross the border despite the current situation will be entitled to cross the German-Luxembourg border without any restrictions. In this connection, the Luxembourg Government has drawn up a certificate for German frontier workers: https://gouvernement.lu/dam-assets/documents/actualites/2020/03-mars/Zertifikat-Berufspendler-Nachweis-Notwendigkeit-Grenzuebertritt.pdf, which attests to the employment relationship between the person concerned and his employer and must be presented to the border control authorities.
b) French frontier workers: The French Government has taken the decision to carry out reinforced controls at the border between the Grand Duchy of Luxembourg and the French Republic. Only frontier workers who can prove the need to cross the border despite the current situation will be entitled to actually cross the Franco-Luxembourg border. In this respect, the Luxembourg Government has drawn up a certificate for French border workers: https://gouvernement.lu/dam-assets/documents/actualites/2020/03-mars/certificat-frontaliers.pdf, which attests to the employment relationship between the person concerned and his/her employer and must be presented to the border control authorities. In addition, French residents will also have to present an „attestation de déplacement dérogatoire“ (available under the following link: https://www.interieur.gouv.fr/content/download/121787/977785/version/1/file/attestation-deplacement-fr.pdf) and a „justificatif de déplacement professionnel“ (available under the following link: https://gouvernement.lu/dam-assets/documents/actualites/2020/03-mars/certificats-france/Justificatif-de-deplacement-professionnel.pdf). Upon presentation of these three documents, the border crosser in question will be exempted from any restrictions when crossing the border.
c) Belgian border workers: The Belgian Government has also just taken the decision to carry out reinforced controls at the border between the Grand Duchy of Luxembourg and Belgium. Only frontier workers who can prove the need to cross the border despite the present situation will be entitled to actually cross the Belgian-Luxembourg border. In this respect, the Luxembourg Government has drawn up a certificate for Belgian frontier workers: https://gouvernement.lu/dam-assets/documents/actualites/2020/03-mars/form-be.pdf, which attests to the employment relationship between the person concerned and his/her employer and must be presented to the border control authorities. On presentation of the abovementioned certificate, the frontier worker in question will be exempted from any restrictions when crossing the border.
The issuance of visas has been suspended. This concerns C and D visas as well as visas in representation of other countries.
1.4 Export control
On 15 March 2020, as part of the response to the consequences of the epidemiological crisis caused by the coronavirus, the European Commission published the Implementing Regulation (EU) 2020/402 making the export of certain personal protective equipment subject to the presentation of an export authorisation. This Implementing Regulation was amended by Implementing Regulation (EU) 2020/426, published on 20 March 2020.
These measures were adopted in view of the increased need for personal protective equipment and the expected increase in demand for such products.
Those measures are not intended to restrict exports to an extent that would go beyond what is strictly necessary.
An export authorisation will be required for
Protective goggles and visors,
Full face protection equipment,
If a product listed above will be exported to a third country of the European Union, except for the countries listed above, an export authorisation is required according to the Implementing Regulation (EU) 2020/402.
The decision to grant an authorisation is subject to the condition that the supply of certain personal protective equipment is guaranteed within the European Union. In other words, an export authorisation could not be granted if the export in question constitutes a threat to the availability of certain personal protective equipment on the market of the Member States of the European Union.
The export application under the Implementing Regulation (EU) 2020/402 must be processed within 5 working days. In duly justified circumstances, the deadline may be extended by a further 5 working days.
If the products are located in a Member State of the European Union other than that in which the application was submitted, the latter must be indicated in the export application. A consultation procedure is initiated between the 2 EU Member States.
The export of the products listed above is prohibited without presentation of an export authorisation, valid on the basis of the Implementing Regulation (EU) 2020/402.
1.5 Prohibition of crowds
Movement on the public roads by individuals is prohibited, except when undertaking he following activities:ss
buying food, pharmaceutical products, and items of absolutely necessity,
buying agricultural or forestry products, and products for viticulture,
travelling to a health centre,
travelling to the workplace to carry out professional or commercial activities,
assisting and providing care for the elderly, minors, or dependent, disabled, and particularly vulnerable people,
travelling to ensure the right of access and accommodation as well as shared custody of children,
in relation with the essential needs of pets,
travelling to social security administrations in an emergency,
travelling to a bank or insurance company, or to postal services in an emergency,
travelling because of force majeure or necessity,
travelling towards shops that are explicitly allowed to be open
Outdoor leisure activities (walking, jogging) are only allowed alone or together with people with whom you live. Gatherings are prohibited.
Civil marriages and funerals are authorised, with a presence of a maximum of 20 people, in respect of the precautionary measures and a distance of at least 2 metres between people.
For all travels and activities, wearing a mask or other or any other means that effectively covers the nose and mouth is mandatory if the distance of at least 2 metres between people cannot be ensured. This protection can be a mask (surgical mask, respiratory mask, homemade cloth mask…) or a scarf, covering mouth and nose.
The national police will enforce and monitor these rules; fines are applicable in case of non-compliance.
All commercial activities (including shops in shopping malls) and in the service and craft sector (including driving schools, beauty salons, hairdressers) normally accessible to the public remain closed.
The sole exceptions are those mentioned above.
In light of the overriding public health demands, and more specifically while ensuring a proper distance between the customer and the professional providing the service, the closure of professional activities does not include:
In the context of a cautious lifting of the confinement measures, construction can open again as of Monday, 20 April 2020. The recommendations and barrier measures of the ministry of Health have to b repected.
1.7 Open businesses, industries and allowed gatherings
Despite the confinement decision of March 16, 2020, a certain category of businesses and industries remain accessible to the public.
Article 4(2) of the Ministerial Order of 16 March 2020 on various measures to combat the spread of the COVID-19 virus sets out a list of activities open to the public, which are not covered by the ban on remaining closed until further notice.
Therefore, businesses engaged in the following activities are not obliged to remain closed:
commercial signs that mainly sell food products,
businesses that sell mainly animal feed,
telecommunications service businesses,
businesses that sell mainly hygiene and washing products, and of sanitary equipment,
fuel sales services and gas stations,
Distributors and shops specialising in medical and health equipment,
medical pedicure limited to medical and non-cosmetic care,
press distribution businesses
financial and insurance institutions,
dry-cleaning and laundry services,
the sale of non-food drive-in products
the sale of non-food products between professionals
Businesses who offer mixed activities, and whose main activity is listed in paragraph 2 of Article 4 of the said ministerial order, may remain open.
In any event, for traders who are not obliged to remain closed and who welcome the public, any natural person visiting the shop is obliged to wear a mask and gloves.
Article 5 of the predicted ministerial order of 16 March 2020 sets out a list of activities that are essential for the maintenance of the vital interests of the population and the country:
the production and distribution of energy and petroleum products,
the health and care sector, including hospital activities and medical analysis laboratories,
the power supply,
the collection and treatment of wastewater,
waste removal and management,
administrative services involved in the exercise of public authority prerogatives,
the system for the exchange, payment and settlement of instruments.
Concerning gatherings, any kind of gathering is prohibited.
1.8 Shareholder's meetings and other meetings of companies
On 18 March 2020, the Luxembourg government declared a state of emergency, temporarily authorising it to take emergency measures by decree. With the decree of 20 March 2020, the government has taken the following measures which have implications for company law. With immediate effect, it is provided that the organs of all companies or legal entities may hold their meetings, in particular the general meetings and board meetings, without the physical presence of their members being required. This system guarantees the effective participation of these members and the exercise of their rights by recourse to
remote voting or;
written circular resolutions or;
other means of telecommunication.
These measures also apply to public broadcasters, economic interest groups and non-profit associations. With regard to the holding of annual general meetings, companies, ASBLs, public bodies and other legal entities may convene annual general meetings for a date which falls within one of the following periods, notwithstanding any provision to the contrary in the Articles of Association:
6 months after the end of their financial year, or;
until 30 June 2020The company is entitled to take this decision for each meeting convened by 30 June 2020 at the latest
Any company which has already convened its meeting and takes such a decision shall make it public and, whe-re appropriate, notify its shareholders, members or other participants thereof, in the manner in which it convened the meeting or by publication on its website, no later than the third working day before the meeting.This document applies to any type of company under Luxembourg law. Source: The Grand-Ducal Regulation of 20 March 2020 provides for the introduction of measures concerning the conduct of meetings in companies and other persons.
1.9 Supply of essential medical goods and medicinal products
As stated above, establishments carrying out activities essential to the vital interests of the population and the country (pharmacies, hospitals, etc.) remain open to the public.
Even if the movement of any natural person on the public highway is prohibited, any person may still move to health facilities. Such movements must nevertheless be made with a mask and gloves.
1.10 Health care
The healthcare system in Luxembourgy
The healthcare system in Luxembourg is one of the best in Europe. The country has a high standard of state-funded healthcare which covers all citizens with basic medical coverage. In addition, they can choose their doctor, specialist, and hospital.
Employed citizens in Luxembourg make health insurance contributions via payments to Luxembourg’s social security system. Coverage includes most treatment by your general practitioner or specialists, any laboratory tests, prescriptions, as well as hospitalization.
Healthcare in Luxembourg is administered by the Ministry of Health which is responsible for policy, regulation, and overseeing services. The country is ranked 7th on the 2018 Euro Health Consumer Index. Its healthcare system has been praised for its comprehensive level of coverage. However, it has also been acknowledged that a significant proportion of residents seek certain treatments (e.g., abortions) in neighboring EU countries.
Who can access healthcare in Luxembourg?
All residents have access to the state healthcare system in Luxembourg. Employed and self-employed workers are required to make social security contributions for access to healthcare services. If you are employed, healthcare contributions will be automatically taken out of your wages by your employer. All dependent family members will also have coverage through workers who pay social security. Children have coverage under their parents, and students have coverage until the age of 27.
Those unable to make contributions due to lack of income or low earnings can get basic medical treatment covered by the state. To apply for this, you need to contact your local social welfare office. More information can be found on the government’s social welfare website.
Temporary visitors to Luxembourg from the EU/EEA/Switzerland can receive healthcare through their European Health Insurance Card (EHIC). Those without a EHIC and visitors from outside the EU will need to purchase private health insurance.
1.11 Persons with a higher risk
The Luxembourg Ministry of Health qualifies as vulnerable persons those "over 65 years of age or those who already suffer from one of the following diseases:
Chronic respiratory diseases
Immune weakness due to disease or therapy
Massive obesity (body mass index > 40 kg/ m2)
Penalties for natural persons:
In accordance with Article 6 of the Ministerial Order of 18 March 2020 introducing a series of measures in the context of the fight against Covid-19, if judicial police officers, officers of the Grand Ducal Police and the Customs and Excise Administration find that natural persons do not comply with the prohibitions and containment measures taken, they issue a warning taxed at 145 euros.
In the event of a repeat offence, i.e. when the same person fails to comply with the containment measures on one or more occasions, he or she risks having to pay a fine increased by 250 euros.
Penalties for commercial and artisanal enterprises:
Article 7 of the Ministerial Order of 18 March 2020 introducing a series of measures in the fight against Covid-19 states that commercial and artisanal enterprises that do not comply with the mandatory closure of their establishment are punished by an administrative fine of 4,000 euros. In the event of a repeat offence, the maximum amount of the fine is doubled.
2. FINANCIAL SUPPORT OF BUSINESSES
The House of Entrepreneurship of Luxembourg has dressed a complete list of business support initiatives. (https://www.cc.lu/en/covid19/business-support/complete-list/):
Short-time work/Partial unemployment schemes
Emergency financial aid for very small business and self-employed people
Overview of Startup Support
Aid scheme for companies in temporary financial difficulty
Measures relating to social security contributions
Extraordinary tax measures
Facilitating bank funding
Measures to help with exportation
Support for projects related to the development and production of products to combat Covid-19
2.2 Partial unemployment schemes / Short-time work
During the period of short-time working, the state shall pay compensation up to 80 % of the salaries. Reimbursement is limited to 250 % of the social minimum wage for unskilled workers aged 18 or over. This compensation may not be less than the amount of the social minimum wage for unskilled workers. Any difference between the amount of the compensation and the social minimum wage for unskilled workers will be borne by the Employment Fund.
A company that resorts to short-time working in cases of force majeure commits not to dismiss employees for economic reasons as long as the relevant government decisions remain in force. The short-time working scheme in the event of force majeure applies in principle to businesses in all economic sectors where the causes invoked are directly linked to the coronavirus. In the case of requests from a non-profit organisation (including sports clubs and federations), they will be analysed on a case-by-case basis in order to avoid double funding.
The short-time working scheme in the event of force majeure related to the coronavirus crisis may apply to employees (under a permanent or fixed-term contract in force at the time of the event of force majeure) who are not covered by a certificate of incapacity for work and who can no longer be employed at all or can no longer be employed on a full-time basis when the company can no longer ensure the normal operation of its activity. Apprentices are also eligible with respect to the share of the salary to be borne by the employer. Temporary work agencies are also eligible with regard to their employees whose assignment contract is ongoing but who can no longer carry out their activity.
The company, or its representative (e.g. a fiduciary), can submit the application using an online assistant available in their business eSpace in MyGuichet.lu. Based on the information provided by the business, the system has identified 2 possible scenarios:
businesses that remain open but nevertheless suffer the negative impact of the coronavirus on their activity. Their application will be automatically transferred to the secretariat of the Economic Committee at the Ministry of the Economy;
businesses that have had to completely or partially stop their activities following the Ministerial Order of 16 March 2020 on various measures to combat the spread of the Covid-19 virus and the Grand Ducal regulation of 18 March 2020 introducing a series of measures to combat the Covid-19 virus. These businesses are directly eligible for short-time working from the effective date of the government decision causing the total or partial closure of their business activity.
Businesses whose application is approved will receive advances based on the expected number of employees unable to carry out their normal activities. These advances enable companies to obtain the cash needed to pay the salaries of their employees.
After the end of the month, the company must draw up a detailed statement showing the actual inactive work hours and the sums actually owed by the state. In the event that the advance was greater than the sums actually owed by the state, the company will be required to reimburse the amounts overpaid.
As the application is only valid for the current or previous month, the business must renew its application each month using the MyGuichet.lu assistant.
Before being able to benefit from the short-time working scheme, all possibilities of maintaining a normal level of employment by the company's own means must be exhausted. The arrangement of holidays is part of the company's own means for maintaining a normal level of employment. Employees must therefore discount the holidays of the years prior to 2020 before benefiting from the short-time working scheme.
The short-time working scheme takes precedence over leave for family reasons. Since the employee who is affected by the short-time working scheme is in principle freed from all work, he is available to keep a dependent child without having to resort to leave for family reasons. Employees on the short-time working scheme are not entitled to benefit from the leave for family reasons. The same applies to one whose partner or spouse is in the short-time working scheme and therefore available to keep the common child or the child who is part of the same household.
2.3 Emergency financial aid for very small business and self-employed people
Emergency allowance for companies employing between 10 and 20 people
The amount of this allowance introduced on 24th April is EUR 12,500 for eligible companies. This allowance is intended for commercial or craft enterprises that have a valid business permit issued by the General Directorate for Small and Medium-sized Enterprises of the Ministry of the Economy:
which are affiliated as an employer at the social security system (CCSS);
which have between 10 and 20 employees registered with the social security system (calculation in FTE / full-time jobs);
who can prove an annual turnover of at least EUR 15,000;
whose turnover and balance sheet total does not exceed EUR 4,000,000;
and who :
have been obliged to close their establishments or cease their activities in mid-March and have not been authorised to resume them at 24 April 2020
which have suffered a loss of turnover of at least 50 % during the period from 15 April 2020 to 15 May 2020 (this is a forecast of turnover for the period mentioned).
The company or its representative (e.g. a trustee) submits the application via an online assistant available through their professional area of MyGuichet.lu.
(-> The form will be put online during the week of 27 April 2020. No application by paper form will be accepted).
Emergency allowance for companies employing less than 10 people
This additional allowance introduced on 24 April amounts to EUR 5,000 for eligible companies. (amount identical to the compensation to which these companies have already been entitled under the Grand-Ducal Regulation of 25 March 2020).
This additional allowance is intended for commercial or craft enterprises which have a valid establishment permit issued by the General Directorate for the Middle Classes of the Ministry of the Economy:
which are affiliated as an employer at the social security system (CCSS);
which have less than 10 employees registered with the social security system (calculation in FTE / full-time jobs);
who can prove an annual turnover of at least EUR 15,000;
whose turnover and balance sheet total does not exceed EUR 2,000,000;
and who :
The company or its representative (e.g. a trustee) submits the application via an online assistant available through their professional area of MyGuichet.lu.
(-> The form will be put online during the week of 27 April 2020. No application by paper form will be accepted).
Emergency financial aid for very small business and self-employed people affected by the Grand-Ducal regulation of 18 March 2020
In the context of the Covid-19 crisis, the General Directorate for Small and Medium-Sized Enterprises has set up an emergency fund for very small companies and self-employed people.
With this aid measure, businesses with up to 9 employess and self-employed persons who have a valid business permit issued before 18 March 2020, with an annual turnover of at least EUR 15,000 and whose activity had to be interrupted following the entry into force of the Grand-Ducal regulation of 18 March 2020 introducing a series of measures in the fight against Covid-19, can apply for immediate and non-payable financial aid of EUR 5,000. Only one application can be made per company (or group).
N.B.: if entrepreneurs have not been through a complete fiscal year, they can still apply or the aid, demonstrating the generation of a certain turnover, prorated to the number of months worked in the year. Their applications will then be reviewed on a custom basis.
Where the applicant is the economic beneficiary of more than one business, they may apply for aid for only one of the businesses, provided that the total number of staff in the business (group) does not exceed a total of 9 (in full-time positions).
The company or self-employed person, or its representative agent (e.g. a fiduciary), can submit the application using an online assistant available in their business eSpace in MyGuichet.lu. The person submitting the application must have a LuxTrust product (e.g. Token, Smartcard or Signing stick) or an electronic identity card.
Establishment of an emergency fund to support the self-employed
This emergency allowance to support the self-employed is to provide financial support, in the form of a certified tax-free emergency allowance for self-employed traders, craftsmen and intellectual workers as well as for managing partners holding a business permit (autorisation d’établissement).This aid may not be cumulated with the certified emergency allowance established by the Grand-Ducal Regulation of 25 March 2020 (see point 2.a.).
The allowance is in the form of a single flat-rate cash payment of EUR 2,500
"Self-employed worker" means any person who mainly
carries out on his/her own behalf:
a professional activity within the scope of the Chamber of Skilled Trades and Crafts or the Chamber of Commerce; or
a professional activity that is mainly intellectual and non-commercial;
holds more than 25 % of the company shares of a société en nom collectif, a société en commandite simple or a société à responsabilité limitée having as its object one of the activities listed above and holds a business permit issued in accordance with the relevant legislation
is a director, general partner or authorised representative delegated to carry out the day-to-day management of a société anonyme, a société en commandite par actions or a société coopérative having as its object one of the activities listed above and holds a business permit issued in accordance with the relevant legislation.
Parental assistants may also receive this aid, subject to certain conditions.
The allowance can only be paid if all the following 5 conditions are met:
the self-employed worker was registered with the CCSS in that capacity on 15 March 2020;
he/she holds all the authorisations and approvals necessary for carrying out the activity as a self-employed worker;
the self-employed worker's professional income used as the basis for calculating his/her social contributions for 2019 plus any pensions paid by a pension insurance body must not exceed the sum of 2.5 times the social minimum wage (EUR 5,354.98 per month or EUR 64,259.70 per year);
the self-employed worker employs fewer than 10 people;
the self-employed worker is experiencing temporary financial difficulties directly caused by the Covid-19 pandemic.
The self-employed worker, or their representative agent (e.g. a fiduciary), can submit the application using an online assistant available in their business eSpace in MyGuichet.lu. Several documents must be attached to the application:
a bank account identification document.
a document indicating the base used for assessing social contributions, plus a pension certificate if appropriate, for 2019.
The aid application must be made via the corresponding MyGuichet.lu assistant and must contain all the following mandatory information:
information about the applicant: self-employed worker / company;
the national identification number (matricule) of the self-employed worker/company;
an exact description of the activity;
the applicant's bank details (the account must be in the applicant's name);
the number of staff in full-time positions;
the consent given to the General Directorate for Small and Medium-sized Enterprises to verify the accuracy of the information provided with the Joint Social Security Centre, the Luxembourg Inland Revenue and the Registration Duties, Estates and VAT Authority;
a signed declaration of honour on the accuracy of the information provided.
2.4 Support to the start-ups
In order to make the most relevant aid measures for start-ups easier to understand, a table presenting the main instruments can be viewed and downloaded on https://www.startupluxembourg.com/support-measures-startups.
Webinars to provide information on aid measures applicable for start-ups
Webinars are organised in order to inform about the main support measures that start-ups can benefit from in the context of the economic stabilisation programme presented by the government.
The experts participating in the webinars will answer questions that young innovative enterprises ask themselves in the current economic context. Information regarding the agenda and registration process for the different webinars is available on https://www.startupluxembourg.com/webinars.
2.5 Aid scheme for companies in temporary financial difficulty
Companies of all sizes and the self-employed, who has been carrying out an economic activity before the unpredictable event, can benefit from this aid in the form of a repayable advance. The aid is subject to three conditions:
an unforeseeable event, officially recognized by the Government for its harmful impact on different economic activities over a certain period of time (which is the case of the COVID-19 pandemic),
that the company is experiencing temporary financial difficulties,
that there is a causal link between these difficulties and the event in question.
Any company, legal or natural, that has commercial, craft, industrial or liberal activity, established in Luxembourg and having a business permit is eligible. This includes small, medium and large businesses, as well as self-employed people / freelancers. Self-employed people with the following main activities are also eligible: scientific, artistic, literary, teaching or educational activity, the professional activity of doctors, dentists, veterinary, midwives, physiotherapists, masseurs, lawyers, notaries, bailiffs, executors of wills, administrators of property, accountants and tax experts, engineers, architects, chemists, inventors, consultants, journalists, photograph reporters, interpreters, translators and similar professional activities.
The fishing sector, aquaculture, primary production of agricultural products and processing and marketing/commercialization of agricultural products are excluded. Companies with financial difficulties before January 1st, 2020 are also excluded.
The aid can cover up to 50% of staff and rent costs, where the latter are capped at EUR 10,000 monthly per company (group). The costs are eligible for the months that fall into the crisis period (2 months). The period used for COVID-19 crisis is from March 15th to May 15th, 2020. The eligible costs are based on the annual accounts for the lastest completed fiscal year. Staff costs cover:
company personnel costs;
income from the exercise of a professional activity carried out as a self-employed person under the condition that the person in question is affiliated as such at the Social Security Code. However, these incomes are capped at an amount equivalent to 2.5 times the minimum social wage per person;
income paid by an association, a company or another group formed by one or more freelancers carrying out their activity within this association, company or other group as a self-employed person under the condition that the person in question is affiliated as such at the Social Security. These costs are capped at an amount equivalent to 2.5 times the minimum social wage, per person.
If the company does not have annual accounts for the latest completed fiscal year, the eligible costs can be calculated:
based on any available financial data, or;
if the company is not subject to the obligation to keep double-entry accounts, based on the last tax declaration.
The amount of the aid (in the form of a repayable advance) may not exceed the maximum amount of 500,000 euros per single undertaking (including the requiring group and its connected companies).
Need to be added:
the name of the applicant company / applicant;
documents providing proof that the company is experiencing temporary financial difficulties and that there is a direct causal link between the unforeseeable event and the company's temporary financial difficulties;
the name, registered office and registration number of the companies which form a single company with the requiring company;
the annual accounts of the latest completed fiscal year, or, as the case may be, any other available financial data, such as double-entryaccounting or the declaration for income tax;
a list of eligible business costs and their amount;
a simplified recovery plan (included in the form) which:
the causes of the difficulties suffered, allowing to verify the direct causal link with the event;
its temporary financial difficulties during the period between March 15th, 2020 and May 15th, 2020 (for example drop in turnover, liquidity problem, etc.);
explains how the proposed recovery measures allow to overcome these temporary financial difficulties (for example recourse to short-time working, SNCI loan, bank guarantee, etc.);
a declaration proofing the absence of a conviction for illegal employment of a third-country workers;
a bank identity statement.
The request for assistance may contain any other useful document in order to allow the Minister to assess the merits of its request.
The repayment of the aid with an annual interest of 0.5% must not begin until 12 months at the earliest after the first payment of the repayable advance. The repayment plan considers the result achieved by the company during the fiscal year in which the aid was granted as well as the following fiscal years. This repayment plan will be established together with the company with the aim of facilitating reimbursement in order to preserve the continuity of its economic activity.
This aid may be cumulated for the same eligible costs with other State aid, provided that cumulation does not lead to exceeding the most favorable maximum aid amount provided by applicable schemes.
2.6 Measures relating to social security contributions
In order to allow the employer who, following the COVID-19 crisis, is in a financially precarious situation, to better manage the payment of social contributions in the coming weeks, the CCSS will put in place temporary measures as of 1 April 2020 (and until the CCSS board of directors finds that they are no longer necessary to be applied):
Suspension of the calculation of default interest for late payments;
Suspension of the procedure for forced recovery of contributions;
Suspension of the execution of restraints by bailiff (‘huissier de justice’);
Suspension of fines to be imposed on employers who are late in reporting to the CCSS.
The aforementioned measures apply not only to future contributions, but also to the current balances of social security contributions, regardless any further remarks (interest, fines, etc.) on the CCSS account statement dated 14 March 2020.
It should therefore be understood that all social security contributions remain due, but the employer will nevertheless be able to better organise its treasury, without having to fear administrative sanctions.
In addition to these measures, the CCSS will proceed with the settlement of an advance on the financial compensation induced by leave for family reasons in connection with the COVID-19 pandemic. This measure aims to advance a substantial part of the reimbursement of wages that employers must continue to pay to the parents concerned and which would normally only be done in May 2020 through the ‘Mutualité des Employeurs’. The CCSS will contact the employers potentially affected by such leave for family reasons in order to provide them with the information necessary to request such an advance on reimbursement from the ‘Mutualité des Employeurs’. The advance will be settled in mid-April 2020.
The current payment periods have thus been put on hold. A new deadline for payment of social security contributions has been implicitly granted by the CCSS without formal request. Assuming that a contributor has accumulated significant delays in social contributions towards the end of the COVID-19 crisis, the CCSS will contact him with a proposal to settle his debt.
There is no cancellation or graceful remission of social security contributions. Social security contributions are due on the professional income actually affected. However, a drop in professional income can be communicated to the CCSS. To do this, you can order the provisional income adjustment form, fill it out and send it by mail to the CCSS. Contributions will be lowered or increased.
In order to speed up the response time to questions, the CCSS asks its clients to contact it via its contact form.
Declarations must be submitted to the CCSS preferably by electronic means via SECUline, possibly using the services of an agent or trustee who already carry out some of the usual procedures with the CCSS. An inventory of all the possible steps with the SECUline tool can be found at www.seculine.lu.
2.7 Extraordinary tax measures
Given the current crisis resulting from the spread of COVID-19, the government has decided to implement several tax measures in favour of legal entities (companies) as well as natural persons. The main objective of these measures is to overcome the need for financing and cash flow of businesses and self-employed persons ('indépendants') who are greatly impacted by the current economic situation.
Further information and FAQ (only in French) here.
Direct taxes: Cancellation of the advance payments due for the first semester of 2020
Legal entities (companies) and natural persons carrying out an activity generating a business/commercial income, an agricultural or a forest-linked income, or an income coming from a liberal profession, facing cash flow issues due to the COVID-19 pandemic, can make a simple request to the Tax Authorities to cancel the tax advance payments for the two first quarters of 2020.
Taxes covered: Corporate Income Tax ('Impôt sur le Revenu') and Municipal Business Tax ('Impôt Commercial Communal').
How to proceed? You need to complete the electronic form. The form only exists in French for the time being.
Direct taxes: 4-month extension of the tax payment deadline
In addition to the above, the same persons can request a 4-month extension of the payment deadline for taxes due after 29 February 2020. The extended payment term will not induce any kind of late payment interests of fines.
Taxes covered: Corporate Income Tax ('Impôt sur le Revenu'), Municipal Business Tax ('Impôt Commercial Communal') and Net Wealth Tax ('Impôt sur la Fortune')
How to proceed? You need to complete the electronic form. The form only exists in French for the time being.
Direct taxes: Postponement of the tax return filing deadline to 30 June 2020
This measure is again applicable to all legal entities (companies) and individuals. This new deadline is also to be taken into consideration by any taxpayer willing to request, amend, or revoke its individual tax assessment method.
Indirect taxes: Reimbursement of VAT credit balances of less than EUR 10,000
Starting this week, the relevant Tax Authorities ('Administration de l'Enregistrement et des Domaines') will automatically reimburse all the credit balances in terms of VAT that amount to EUR 10,000 or less. It is estimated that this measure should be helpful for about 20,000 companies in Luxembourg.
2.8 Facilitating bank funding
Mutualité de Cautionnement - Bank guarantee for companies with cash-flow difficulties
A measure decided to help companies to face financial difficulties and especially liquidity problems, is the setting up of a specific surety in the form of a guarantee that the Chamber of Commerce offers via its Mutualité de Cautionnement to companies that need credit or a bank loan. This guarantee will be up to 50% of the credit and covers a maximum amount of EUR 250,000 per guarantee. In order to guarantee rapid assistance to companies that request it, a procedure for analysing files within 48 hours has been put in place.
Companies who would like to take advantage of this guarantee must apply directly to their bank, who will decide whether or not to release the credit. The Chamber of Commerce is in contact with the banks to organise the provision of this new service. In addition, information on this crisis intervention tool can be requested via the following number: +352 42 39 39 - 445 or on www.cautionnement.lu.
Read some testimonials , by clicking here.
The « Financement Spécial Anti Crise - FSAC » of the SNCI
The SNCI has set up a « Financement Spécial Anti Crise - FSAC »(Special Crisis Financing) for a SNCI envelope of up to €400 million corresponding to a total leverage effect of nearly €700 million, including bank financing.
This instrument is aimed at Luxembourg SMEs and large companies with an establishment permit under the law of 2.9.2011 for the financing of any exceptional needs arising in the context of the COVID-19 crisis, for financing decisions taken until 31.12.2020.
The financing is done indirectly through the client's usual bank - the SNCI finances up to 60% of the need, on condition that the bank finances 40%. The amount of the FSAC (SNCI part) can vary between €12,500 and €10 million. Disbursement of the SNCI is made without further formalities at the request of the client's bank. The maximum duration of the FSAC is 5 years with an initial grace period on the repayment of the capital of max. 2 years.
The FSAC represents a paradigm shift for the SNCI in the sense that it covers short-term financing needs that have arisen exceptionally in direct relation to the current crisis.
State guarantee scheme for new bank loans for a maximum period of 6 years
The State guarantee scheme for new bank loans for a maximum period of 6 years is a scheme where the new credit lines will be guaranteed at 85% by the State and 15% by the participating banks for loans granted during the period from 18 March 2020 to 31 December 2020. These new credits are reserved for businesses that were viable before 18 March 2020 (state of emergency). The assessment of whether a business was viable or not is the sole responsibility of the banks. The maximum amount of eligible loans can be up to 25% of your business turnover for the year 2019 (or failing that, the last year available).
First, you need to contact one of the participating banks to apply for a loan. Then, your bank will notify the State Treasury of the granting of the loan in order to benefit from the State guarantee. The guarantee premium for SMEs, borne by the borrower, is 0.25% for a maximum maturity of one year, 0.50% for a maximum maturity of 3 years and 1% for a maximum maturity of 6 years. For large companies, the guarantee premium is 0.50% for a maximum maturity of one year, 1% for a maximum maturity of 3 years and 2% for a maximum maturity of 6 years.
2.9 Measures to help with exportation
In the context of the coronavirus COVID-19, ODL has implemented the following measures to strengthen its support to Luxembourg companies:
increase of the percentage of cover of limits and contracts issued during the state of crisis in the context of export insurance;
collaboration with the Mutualité de Cautionnement with the establishment of insurance for guarantees issued by the Mutualité, allowing them to increase their loan capacity;
flexibilisation of the “Bank loans insurance” which allows banks to partially reduce the risk of non-repayment of the loans they grant to Luxembourg exporters for the development of theirinternational activities. In this context, ODL will also soften the conditions applicable to this product, in particular by increasing the percentage of insurance and by broadening the definition of eligible bank loans;
increase of the percentage of the insurance product for bank guarantees which is aimed at banks of Luxembourg exporters to ensure the guarantee line granted by the bank and inclusion of import guarantees in the field of insurance application;
reduction of the claim period which will allow companies to be compensated more quickly in the event of a claim;
reduction of the reimbursement delay for invoices paid in the context of financial support.
For any questions or clarification regarding the above measures, the ODL team remains at your disposal.
2.10 Mediation centre
Mediation is a voluntary process for settling disputes in which an impartial, independent third party trained in mediation techniques organises exchanges between people or institutions to improve their relationship or to manage a dispute between them. The mediator is a qualified person, attentive to the interests of each party. He or she structures the meetings by guaranteeing a dignified environment and by making mutual understanding possible. The mediator is bound by professional secrecy. The mediation centre is open on Mondays, Tuesdays, Thursdays and Fridays from 9:30am to 11:30am and from 2pm to 4pm, and on Wednesdays from 2pm to 4pm. They can be reached on +352 27 85 42 1.
2.11 Support for projects related to the development and production of products to combat Covid-19
As part of the programme to stabilise the economy, on 8 April the Government Council approved an aid scheme to support both industrial research and experimental development projects and investment projects enabling the production and development of products to help combat the health crisis linked to Covid-19.
Examples of R&D projects eligible for support include research and development on medical devices or hospital equipment such as fans, protective equipment or disinfectants, as well as process innovations for more efficient production of the necessary products.
An industrial research and experimental development project can be supported up to 80% of the costs or up to 100% in the case of basic research. If the R&D project is carried out as part of a cross-border collaboration with another company or research organisation, the aid intensity may be increased by 15% but may not exceed 100% of the costs.
As for the investment projects eligible for a grant, they may relate in particular to the production of products relevant to the fight against Covid-19, medical devices, hospital and medical equipment (protective clothing and equipment, ventilation equipment, diagnostic tools, disinfectant). Such an investment project may receive aid of up to 80% of the investment costs. The aid rate may be increased by 15% if the investment project is fully completed within two months.
As part of the investment aid, the company may also request a guarantee to cover any losses linked to the investment. The amount of the guarantee depends on the duration of continued production, but is limited to 30% of the loss and to an absolute amount of EUR 500,000.
A financial envelope of 30 million EUR
For both types of support, i.e. aid for research projects and aid for investment linked to the production of relevant products, a total financial envelope of EUR 30 million is foreseen.
3. Financial support of workers
3.1 Leave for family reasons in connection with the coronavirus pandemic
In the context of the measures adopted by the Government to contain the spread of the coronavirus, a specific form has been drawn up for those parents who have to look after their child(ren) under 13 years of age, so that they will be able to benefit from leave for family reasons.
If you have already submitted an application using the form that was made available online on 30 March, there is no need to complete and submit a new one.
Leave for family reasons may be taken by a parent of such a child if no other childcare options are available.
If necessary, parents may alternate their leave for family reasons. In this case, each parent must send in a separate form.
It is also recommended that childcare should not be provided by a vulnerable person or a member of a group at risk.
The Extraordinary leave for family reasons (COVID-19) is an extraordinary leave, limited in time, that will not affect the balance of the regular for family reasons. It is treated separately from the regular balance of leave for family reasons.
The leave for family reasons remains in force as long as schools, crèches, etc. are closed, as well as during the transitional phase of the resumption of school life.
Who is entitled to leave for family reasons and who is not?
One of the parents who is affiliated to the Luxembourg social security scheme (including non-residents) of one or more children under 13 years of age on condition that they are schooled and are concerned by the temporary closures of teaching structures in primary and secondary education, vocational training, childcare (crèches, daycare centres (maisons relais)...) etc.
Parents of children with a disability who are between 13 and 18 years old (or up to the age of 25) may benefit from the leave for family reasons provided they receive the special supplementary allowance for disabled children from the CAE.
Leave for family reasons is aimed at parents who:
are employed; or
are in a non-salaried activity; or
Leave for family reasons may be taken by a parent of such a child if no other childcare options are available:
If one of the following persons can provide for the care of the parents' child or if another member of the household can provide for the care, e.g. because said person is benefiting from short-time work during the period of leave for family reasons applied for, then the parent of the child cannot benefit from leave for family reasons:
the other parent;
the parent's spouse;
anther member of the household concerned.
Similarly, if another means of care is available, for example a specific structure made available allowing for the care of the child, then the parent is not entitled to use leave for family reasons.
Moreover, both parents (or spouse) cannot take leave for family reasons at the same time.
These limitations do not apply in the case of telework that remains work performed from home and during which the parent cannot provide care for the child.
What to do to be able to take leave for family reasons
A parent who needs to take leave for family reasons must inform his/her employer as quickly as possible, either verbally or in writing, and indicate the start and end date of said leave. The parent must then fill in the appropriate form, sign it, and send it to both the National Health Fund (Caisse Nationale de Santé - CNS) and his/her employer. Employers will transmit the statement of actual days of leave for family reasons in accordance with the general procedure to the social security bodies.
INFORMATION ON HOW TO FILL IN THE FORM
It is not necessary to indicate a start and end date on the form. These dates only need to be communicated to the employer.
A new form (put online on 30 March) is available. The form must be completed and sent to the employer and to the CNS even if a previous form has already been sent. If you have already submitted an application using the form that was made available online on 30 March, there is no need to complete and submit a new one.
There are two options for electronic submission of the form:
print the document, sign it by hand, scan the form or take a photo and send it by email to email@example.com; or
save the form on your computer and then complete it electronically with Adobe Acrobat, sign it electronically with a LuxTrust smartcard, and send it by e-mail.
The subject line of the mail must contain the identification number (13-digit number).
SUBMISSION BY POST
The form can be sent by post. The document must be printed, signed by hand, and sent to the following address:
The form must be sent by normal post (not by registered mail).
Procedure for the self-employed and non-salaried.
Self-employed persons can benefit from leave for family reasons.
The procedure consists of filling in the form and returning it to the CNS at the end of the period.
by email to firstname.lastname@example.org, including the 13-digit national identification number in the subject line; or
by regular (non-registered) mail to the Pecuniary Allowances Department L-2980 Luxembourg
The days that have been taken must be clearly identified.
3.2 Advance payment for the reimbursement of leave for family reasons
As described in detail in Point “3.a) Leave for family reasons in connection with the coronavirus epidemic”, a specific form has been drawn up for those parents who have to look after their child(ren) under 13 years of age, so that they will be able to benefit from leave for family reasons.
In order to help employers in financial difficulty, the Joint Social Security Centre (CCSS) will pay an advance for the reimbursement of extraordinary leave for family reasons (CPRF).
The aim is to advance a large part of the amount for the reimbursement of the salaries that employers had to continue to pay to the parents concerned by the CPRF in March 2020. The employer thus benefits from an advance, which will be liquidated in mid-April, while the reimbursement by the Employers' mutual insurance scheme will take place in May at the earliest.
The employers concerned have received a letter from the CCSS with a unique code. This code allows employers to complete the online application to benefit from the advance. This code will never be sent electronically!
Please note: the form for the online application is accessible until April 8 inclusive.
On the basis of this online application, the CCSS will pay an advance to the employer around mid-April 2020.
At the same time, during the month of April, the employer must proceed with the declaration of leave for family reasons of their employees for the month of March. Employers must transmit this declaration by the usual means of transmission (SECUline DECMAL procedure or paper version) and use the type 2 code.
The CCSS will regularise the advance at a later date.
The advance and the regularisation of the advance shall be clearly visible on the statement of account (invoice) sent to the employer.
Employers who have not been contacted by the CCSS for the advance, can still benefit from the reimbursement by the Employers mutual insurance scheme.
4. Financial support of the cultural sector
4.1 Additional support measures for independet professional artists
On 17 March 2020, the Luxembourgish Government adopted an amendment to an act dated December 19, 2004 concerning social measures for the benefit of independent professional artists and temporary workers in the performing arts, among others in order to offer additional support to independent professional artists whose work is impacted by the coronavirus.
This amendment, transposed by the law of 3 April 2020 and the grand-ducal regulation of 3 April 2020 provides:
social assistance for self-employed professional artists with the possibility of paying monthly social assistance up to the minimum social wage for qualified persons, provided that the difficulties in performing artistic performances are related to the exceptional event of coronavirus, which is recognized by the Government in Council as having a detrimental impact on activities falling within the scope of the 2014 Act;
that in order to be eligible for aid of a social nature, the income of at least four times the monthly minimum social wage for unskilled workers, which must be generated during the year preceding the demand, is reduced by an amount of EUR 714 for each month during which the state of crisis persists.
4.2 Additional support measures for intermittent performers / casual entertainment workers
In the same vein, on 17 March 2020, the Luxembourg Government also amended the law of 19 December 2004 to protect casual entertainment workers.
This amendement provides:
additional daily allowances of up to 20 additional daily allowances for each month of crisis status, in the event of involuntary inactivity compared to the 121 daily allowances provided for in "normal" times, provided that the exceptional event constituted by the coronavirus, which is recognised by the Government in Council as having a harmful impact on the activities falling within the scope of the 2014 Act, has prevented the entertainment worker from offering his or her services as provided for by law, within the limit, of course, of the number of days in the month in question;
that in order to be eligible for aid of a social nature, the period of eighty days within the 365 calendar-day period preceding the application for the opening of rights to compensation, which the casual entertainment worker must justify, is reduced by 7 days for each month during which the state of crisis persists.
in order to be eligible for social assistance, the income of at least four times the monthly minimum social wage for unskilled workers, which must be generated in the year preceding the application, is reduced by EUR 714 for each month during which the state of crisis persists.