The economic consequences associated with the COVID-19 pandemic continue and are increasing. The European Commission broadened and enhanced State aid. In turn, the Luxembourg Government decided to enhance the support measures in place to encourage and support the companies significantly impacted by the COVID-19 pandemic.

On 12 February 2021, the Governing Council approved broadening of the:

  • new economic stimulus; and
  • aid for uncovered costs.

These measures were established by 2 laws of 19 December 2020, which entered into force on 21 December 2020, one of which the purpose was to establish temporary contribution by the State to uncovered costs of certain companies, and the other was to establish a new economic stimulus for certain companies.

To handle the current crises with the sole objective of encouraging companies to continue their activities, the Luxembourg Government decided that:

  • Aid for uncovered costs would exempt up to 25% of the monthly turnover from the calculation of income, for the period from February through June 2021, on the condition that closing of the business was legally imposed;
  • The entirety of uncovered costs will be compensated for the period from February through June 2021, for companies that were required to close or that suffered a loss in turnover of at least 75% because of the legal restrictions imposed on gatherings;
  • The aid for uncovered costs, initially planned to last through mars 2021, will be extended by 3 months, through June of 2021;
  • The new deadline for the beginning of a company’s activities was set at 31 December 2020 and thus companies having begun their activities after 31 October 2020 can take advantage of the stimulus;
  • Companies having lost turnover of the less than 25% required for January of 2021, can also benefit from the stimulus for the month in question if they were required to close during the month in question;
  • The economic stimulus, initially planned to last through March of 2021, is also extended by 3 months, through June of 2021.

Information on the other aid in place, particularly for the self-employed, is available at Guichet.lu.

If you wish to know more on the enhancement of the support measures in place, taken in the context of COVID-19, we invite you to contact us at contact@dsm.legal.

By Alessandra MEDINA, Senior Associate.