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Further increase in the volume for the COVID-19 Investment Premium

01/15/2021 - Reading time: 5 minutes


Florian Kranebitter


With the federal law of 31 December 2020, the volume for the investment premium was once again increased to a total of 3 billion euros. The application deadline is already 28 February 2021. It is also time-sensitive that the investment must be started before 1 March 2021. The area of application and variations in combination with financing provide some range.

With the goal of creating an incentive for companies to invest in their fixed assets during and after the COVID-19 crisis, the investment premium subsidizes tangible and intangible new investments in a company’s depreciable fixed assets at Austrian locations that have to be capitalized. In particular, investments with a negative impact on the climate, undeveloped land, financial assets, corporate takeovers and own work capitalized are excluded from the subsidy. Existing and newly founded companies of all sizes and of all sectors whose registered office or place of business is in Austria are eligible for subsidies. An association (Verein) is also eligible if it fulfills the definition of an enterprise according to §1 of the Austrian Commercial Code (UGB) (i.e. if it is not financed exclusively by fees of its members and has external activities). The investment premium is 7% and 14% for new investments in the areas of digitization, ecologization and health/life science.

With the federal bill of 31.12.2020 (Federal Law Gazette I no 110/2020), the funding volume, which had already been previously increased to 2 billion euros, was increased by a further billion to 3 billion euros total. However, the other terms of the law and the guidelines and, above all, the already very timely deadlines have so far remained unchanged.

The application deadline is already 28 February 2021. Moreover, only those measures that have been “started” in the period from 1 August 2020 and 28 February 2021 are eligible for the subsidy, where “started” means the “setting of initial measures” in connection with the corresponding investment. Such initial measures are orders, deliveries, the start of services, down payments, payments, invoices, the conclusion of purchase contracts or the start of construction of the eligible investment. Mere planning services, obtaining of official approvals, financing discussions and financing applications or commitments, would not be sufficient to qualify as initial measures. No initial measures must be taken before 1 August 2020 and after 28 February 2021.

Aspects that should be taken into account when considering the use of the investment premium include the following:

  • Under certain circumstances, more comprehensive projects can be divided into several separate investments, which on the one hand may help to expand the design variants for the 7% and 14% premium, and on the other hand constitutes different payment dates for the premium.
  • The joint application for the investment premium for several investments may become critical because the office taking and evaluating applications (aws) takes the view that for each investment that is comprised by one single application a separate “initial measure” must have been started in time (i.e. before 1 March 2021).
  • Own work capitalized (aktivierte Eigenleistungen) may also qualify as new investments eligible for the investment premium if it is sold within a group of companies.
  • The use of a subsidized machine or plant abroad does in principle not constitute an act detrimental to the subsidy, provided that no permanent establishment within the meaning of the Federal Tax Code (BAO) is established abroad.
  • Used goods must represent a new investment for the applicant company in order to be eligible. This also applies in particular to group companies.
  • Lease-financed fixed assets are eligible for the premium only upon the condition that they are also capitalized by the applicant company. The same applies to lease-purchase agreements which are eligible only to the extent that they are capitalized as fixed assets by the applicant company.
  • Combinations with other support instruments are permitted and are not to be understood as cumulating within the meaning of state aid law.

The investment premium is paid in the form of a tax-free, non-repayable grant of at least 5,000 euros up to a maximum of 50 million euros. Applications must be submitted via the Austria Wirtschaftsservice Gesellschaft mbH (aws).

The premium is paid out after the final settlement of the investment. Exceptions to this principle exist only for investment volumes exceeding 20 million euros net, for which an interim payment can be requested after at least half of the eligible investment volume has been carried out.

The investments must be settled and commissioned by 28 February 2022 at the latest or by 28 February 2024 in the case of an investment volume of more than 20 million euros net, whereby payment may also be partly or wholly financed by third party financings.

The extent to which premium-eligible investments can be combined with bank and shareholder financing, or with corporate transactions and joint ventures in general, must be examined on a case-by-case basis, but combinations open up interesting prospects, especially in the context of larger investments.


Florian Kranebitter