Hamburg's ten-point protective shield

Dressel remarked: “In addition to the German government’s measures, our protective shield sends a clear signal to our city in this difficult situation. Hamburg is active and helping! We have the financial and economic strength to cope with the effects of the coronavirus epidemic in co-operation with all those involved. We are united in protecting employees and companies of all sizes across all sectors. The German government has launched an aid programme worth billions, as well as tax and labour market policy measures in particular, which are being supplemented and readjusted constantly. Many in business and society in Hamburg are involved. At the same time, the senate and its ministries have been working hard in recent days to concretise and supplement the comprehensive measures taken by the German government for Hamburg.” Dressel added: “The results are the first cornerstones of Hamburg’s protective shield for companies and institutions in our city impacted by corona, which provides initial, concrete answers to specific challenges in Hamburg. This protective shield will be implemented gradually and adapted to measures, especially to those of the German government and continuously developed. It hinges on talks between commerce and society in our city.”

Westhageman remarked: “I have gained an impression of the present situation in many talks this week. Clearly, the corona pandemic will affect a great many companies – across all industries, regardless of size. I would like to find a solution especially for the small and smallest companies. Therefore, we have to absorb the expected consequences and not lose any time. Now is the time to help those who find themselves in a financial emergency, swiftly and straightforwardly. Clearly, we must also think today about the period after the current limitations on the economy”.

Brosda noted: “The current situation is extraordinary for everyone and hits many cultural and creative industries especially hard. We have held many talks across all cultural and creative sectors in the past days. We have put together a very comprehensive package swiftly and unbureaucratically that will provide flexible aid that goes beyond existing offers for emergency situations. The superordinate instruments will also help many affected cultural institutions, artists and self-employed people. Furthermore, it is good that we ourselves can act in the immediate fields of cultural promotion. Our goal must be to do whatever is needed for our health now. At the same time, we must create a foundation that helps everyone get through this period as best as possible. This will require a special effort from everyone.”

The senate and IFB are setting up an emergency aid programme for SMEs and freelancers (HCS), which as addressees of the city’s corona-related general decrees, find themselves in life-threatening situations or “liquidity shortages that might lead to insolvencies*. The HCS will be staggered according to the number of employees and will supplement the general emergency fund being prepared by the German government. It foresees immediate, real grants of:

- 2,500 € (solo self employed)
- 5,000 € (fewer than 10 employees)
- 10,000 € (10-50 employees)
- 25,000 € (51-250 employees)

To bring the funding in line with the German government’s emergency fund, the precise application, approval and disbursement procedure is expected to start after the German cabinet’s decision on the federal emergency fund next week.

The Ministry of Finance has released EUR 10 million in aid for urgent corona fighting measures and support for corona control by the health authorities and district health departments. Employees in Hamburg’s authorities, district offices and their subordinate institutions, as well as medical personnel charged with combatting and restricting the spread of the disease, require sufficient personal protective equipment at short notice to be able to test for suspected COVID-19 cases and for contact tracing.

The Ministry of Culture and Media is providing EUR 25 million in aid for the cultural sector and is issuing a supplementary funding directive to compensate for economic hardship in accordance with general decrees on COVID-19. This should allow the ministry to provide financial aid for cultural institutions and freelance artists suffering from the fallout triggered by the corona crisis and those facing financial distress and liquidity shortages.

Cultural institutions, private theatres or music clubs are eligible to apply. Existing funding frameworks in the respective sectors will be further developed. Funding can be provided for proven, overhead costs that can no longer be covered by the institution’s own funds due to closure, cancellation of events or ongoing contractual obligations. Artists, who are registered as solo self-employed with the Kuenstlersozialkasse and who run a corresponding institution in Hamburg or have their main residence there, can avail of the IFB’s immediate corona aid. Emergency aid of EUR 2 million will be set up to compensate for financial losses not covered by other aid measures. The Ministry of Finance will provide for further, immediate measures by these and other authorities.

IFB’s existing funding programmes will be expanded significantly to flank the development programme launched by Kfw for Hamburg.

The first building block will be the HamburgKredit-Liquidität (HKL), which can provide SMEs with targeted loans of up to EUR 250,000 each to ease liquidity in the sector in conjunction with other measures. In reference to interest and repayments, the European legal framework will be used fully to help the borrowers.

IFB (IFB-Förderkredit Sport) will provide a new support module to provide urgently-needed funds for cultural institutions (IFB-Förderkredit Kultur) and sports clubs including those with a separate professional sector and organisers of sports events. Until now, these programmes have only funded investments in the sports and cultural sector. IFB is amending the funding guidelines to allow for the first applications this week. As a rule, loans of up to EUR 150,000 each will be provided, interest and repayment will address the problems of institutions in culture and sports in Hamburg in this unprecedented situation. The legal framework will be revised for this.

The IFB’s tried and tested credit and development programmes in co-operation with KfW and those of the borrowers’ banks are also available. The entire financial sector is urged to deal with the situation as unbureaucratically as possible and to collaborate with all those involved.

The following measures will be taken in the guaranteed area to secure and accelerate access to working capital funding particularly for small and micro-enterprises in view of the corona crisis:

- In reference to the Bürgschaftsgemeinschaft Hamburg GmbH (BG), the maximum guaranteed amount will be doubled from EUR 1.25 million to EUR 2.5 million.
- To speed up proceedings, BG will issue guarantees up to EUR 250,000 in the context of so-called “genuine own competence”. This will allow BG alone to decide whether to issue the guarantee within 72 hours.
- Working capital funding is now available to existing companies with an 80 per counter-guarantee (previously up to 60 per cent).
- The upper limit of 35 per cent working capital in total exposure will be increased to 50 per cent.

The measures apply immediately to all new guarantees issued by companies that were economically sound up to December 31, 2019 and are limited initially until December 31, 2020. The volume guaranteed by the city as a whole will be expanded accordingly.

The so-called corona decree on tax agreed between the German government and state governments is in force. Tax authorities in Hamburg had been very active in this matter and revenue offices now have the tools needed to overcome liquidity shortages caused by suspending tax liabilities temporarily until 31.12.2020. The decree focuses on the interest-free deferral of taxes covered by the Bundesauftragsverwaltung Federal Tax Administration (income tax, corporation tax, turnover tax) and the reduction of quarterly advance payments due under simplified conditions.

If the taxpayer has tax arrears at present, cases that have been proven to be affected by the corona virus can be relieved of enforcement (waiver of enforcement measures and late payment surcharges). They must be agreed individually with the collection agencies in the revenue offices. Corresponding regulations will be issued in reference to trade tax administered by Hamburg as well as the state and municipal taxes. They will be published in a state decree, so that the tax relief can be granted as a whole.

The directors of the tax administration were to inform the 14 Hamburg tax offices of this new legal situation Thursday (March 19, 2020), so that these regulations can be accommodated seamlessly. However, effective measures can only be taken, if the taxpayers concerned contact their revenue office in good time and as soon as the regulations have been announced.

In line with the tax relief, Hamburg will extend deferrals and waivers of municipal fees for companies, tradespeople and other institutions concerned by means of a corona fee circular. Those liable for fees, and who are demonstrably directly and not inconsiderably restricted in their economic activity by Hamburg’s general decrees on corona, have until 31 December 2020 to apply for deferral or remission of the fees already due or payable by that date, in accordance with § 21 of the German Fee Act (GebG), and giving details of their circumstances. The avoidance of undue hardship caused by the coronavirus has been deemed a “public interest” according to of § 21 (1) 2 GebG.

To simplify the procedure, requests for deferral can be emailed to the contact persons named. There are no strict requirements for reviewing the conditions of a deferral. As a rule, interest on deferrals can be waived. In cases in which, due to general decrees, the service on which the fee is based or predominantly cancelled (e.g. cancellation of events, restricted use of public areas), a review of partial remission or waiver of the fee will be carried out on request.

Companies and institutions in Hamburg that lease urban property can have their rent deferred interest free for up to three months on application to their respective landlord. The deferral commitment by Sprinkenhof, GMH, HHLA and LIG for commercial, private tenants in municipal properties can be a first valuable building block for many commercial tenants. Their commitment is effective immediately. An informal application for it can now be submitted. Commercial tenants affected should contact their landlord promptly and should substantiate how they have been impacted by the general decrees. SAGA made the first similar commitment on March 19, 2020. The senate has asked private commercial landlords in Hamburg to follow this example as well.

Recipients of grants can rely on their continued payment despite the city’s general rules restricting work. The relevant authorities have written clarifying letters to this effect. The corona-related restrictions should not cause recipients any significant disadvantages. This applies in particular to fixed costs (e.g. rent and salaries as well as contractually bound freelancers).

Due to the current spread of the coronavirus, tax authorities wish to simplify public procurement regulations law to ease handling. Based on Section 2a (3) in conjunction with Section 12 No. 1 of the Hamburg Public Procurement Act (HmbVgG), the tax authority sets the limit for negotiated contracts on supplies and services in connection with procurements to secure the supply to the population and to combat the spread of the coronavirus up to the EU threshold for supply and service contracts under Section 106 (2) No. 1 of the ARC, currently EUR 214,000.

The city wants to be a good investor, client and reliable contractual partner for the private sector. “Just as Hamburg will defer claims to strengthen the liquidity of companies affected by general rulings, the city will, conversely, settle incoming invoices from suppliers via the Kasse.Hamburg not only when they are due, but immediately,” a statement said. As a result, companies will have the corresponding liquidity available to them sooner.
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