Health crisis - Support mechanisms for companies

March 19th 2020

As a result of the coronavirus epidemic, various measures have been taken in order to assist companies in difficulty.

Payment periods for tax instalments

The companies in difficulty may request from their local tax office (SIE) a 3 month deferral (without penalty) for their subsequent tax installments (CFE (company property tax), CVAE (company added value tax contributions), corporate tax and tax on salaries).

This tolerance is not applied to VAT and related taxes, and the repayment of the PAS (social welfare tax).

Concerning the down payments for corporate tax dated 16th of March:

  • You may contest the SEPA direct debits with your bank;                                                            
  • Failing that, you may request the reimbursement with your SIE, once the direct debit has been made.

If there are evident difficulties for the payment of these taxes (which must be justified), it shall be possible to request a refund.

The tax administration has provided a form for companies in this respect: https://www.impots.gouv.fr/portail/actualite/demande-de-delai-de-paiement-ou-de-remise-pour-les-entreprises-en-difficulte-suite-au
 

Payment periods for social installments

The employers with an URSSAF (French social contribution fund) instalment date on the 15th of the month may defer all or part of the payment of the employee and employer contributions, the instalment date of which is due on March 15, 2020.

In this case, these contributions may be deferred for up to three months and no penalty shall be applied.

The payment of the contributions may be modulated according to the company’s needs (payment at 0 euro or partial payment of the contributions).

The modus operandi differs depending on the regular payment method and whether or not the DSN (social declaration) for February has already been filed.

The practical arrangements for such a deferral of the contributions due on the 15th of March are accessible on the URSSAF website: https://www.urssaf.fr/portail/home/actualites/toute-lactualite-employeur/mesures-exceptionnelles-pour-les.html

For the employers with an instalment due on the 5th of the month (next installment due on the 5th of April), the information is currently being processed by the URSSAF.

Finally, the deferral or approval is also possible for the supplementary pension fund, by contacting the supplementary pension fund directly.
 

Simplified partial unemployment mechanism

The decree no. 2020-260 dated March 16, 2020 relating to the travel regulations to prevent the propagation of the Covid-19 virus, (OJ dated the 17th of March), provides that “it is prohibited for any person to leave his home until the 31st of March 2020 with the exception of outings for the following reasons, within the respect of the general preventative measures for the propagation of the virus and preventing any group gatherings:

1° Travel between the home and the office and essential business trips;

2° Outings to purchase supplies necessary for the professional activity and purchases of essential products in establishments for which the activities are authorized under the health minister’s order taken on the basis of the provisions of Article L. 3131-1 of the French Public Health Code;

3° Outings for health reasons;

4° Outings for imperative family reasons, for the assistance of the sick or elderly, or for childcare;

5° Short outings, near the home, for individuals’ physical exercise, at the exclusion of any collective sports, and for walking dogs or other domestic pets”.

In these conditions, the employer must:

This certificate is valid for one outing and valid until March 31, 2020.

The employees must carry the certificate every day mentioning that they are making a return trip to their place of work or for an essential business trip. The derogatory travel certificate is downloadable from the same website and may also be written on plain paper. A fine may be imposed in the event of non-compliance with such rules and criteria.

Recourse to partial activity

All the companies facing a decline in activity as a result of the coronavirus epidemic and, in particular, those (restaurants, cafes, stores, etc.) which are obliged to close in accordance with the order dated March 14, 2020, are eligible for the partial activity mechanism.

The partial activity mechanism enables the employer to reduce its employees’ working time or temporarily partially or fully close its establishment.

The partial activity setup requires a prior authorization from the administration.

The authorization request shall be made on line on the website: https://activitepartielle.emploi.gouv.fr/aparts/.

The draft decree modifying the partial activity mechanism announced by the Employment Minister provides that:

  • The employer is obliged to indemnify its employees for up to 70% of their gross remuneration (i.e.,
    84 % of the net salary);

The partial activity allowance that the employer receives from the State is equal to 70% of the relevant employee’s gross remuneration capped at 4.5 times the hourly minimum wage rate. This hourly rate shall not be less than 8.03 euros.

  • The employers shall benefit from a period of 30 days to file their partial activity request, which shall be retroactive;
  • The economic and social committee’s (CSE) opinion may be sent to the administration within a period of two months as from the prior authorization request;
  • The companies may benefit from the mechanism for a maximum period of 12 months, if this is justified (versus the current maximum period of six months);
  • The employees working on an hourly or daily basis are eligible for partial activity, including when the establishment is not subject to a total closure.

Finally, the Labor Minister, Muriel Pénicaud, mentioned in the journal Les Echos dated March 16, 2020 that the companies would not have any other choice than to have recourse to partial activity and that the employment safeguard plans during the Coronavirus crisis are prohibited. Accordingly, no dismissal plan may be validated or approved as from March 15, 2020. 

 

Deferral of loan repayments and support from the Credit mediation

In the event of difficulties for companies to request a deferral of their bank loan repayments or bank overdrafts, it is possible to refer the matter before the credit mediation, by filing an online request: https://mediateur-credit.banque-france.fr/saisir-la-mediation/vous-allez-saisir-la-mediation-du-credit
 

Support from BPIFRANCE to guarantee bank overdraft facilities

To support companies, the activity of which is affected by the coronavirus, Bpifrance has setup a series of measures:

  • Granting the Bpifrance guarantee, for cash loans granted by French private banks to companies affected by the consequences of the Coronavirus,
  • Extension of the standard credit investment guarantees, to accompany the reorganization operated by the banks, without management costs,
  • Medium and long term credit reorganization for the Bpifrance clients: rescheduling shall be made automatically.

Furthermore, in the context of the company emergency support relaunch plan, Bpifrance grants loans to support the cash flow for small to intermediate sized companies, which are currently facing financial difficulties due to the current sanitary crisis (unsecured loans, without security interests on the company’s assets or those of its director).

Bpifrance makes availables a secure access for companies to inform and guide them to manage their cash flow issues:

Support for managing a dispute with clients or suppliers

In the event of difficulty with clients or suppliers, it is possible to refer the matter before the company mediator who shall attempt to resolve their disputes free of charge through mediation: https://www.economie.gouv.fr/mediateur-des-entreprises/coronavirus-laction-du-mediateur-des-entreprises-au-service-des-acteurs
 

Acknowledgment of the coronavirus by the state and the local authorities as a force majeure event for their procurement contracts.

The late payment penalties shall not apply to the State and local authority procurement contracts.

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All the Ydès’ teams will be there to support and assist you in this difficult period.