Act on support and compensation for restaurants confirmed – entry into force on 5 June

On 29 May 2020, the President of the Republic confirmed the act on support for job retention and re-employment and compensation for the restriction of activities for companies in the food and beverage service sector. In the first week of June, the Government will issue a decree on the entry into force of the new act. The Act is scheduled to enter into force on 5 June 2020.

Following the closure of restaurants and other food service companies, Parliament required compensation for reasonable costs and measures to mitigate the effects of the restrictions. The Government proposed to Parliament a model with two parts, one part being support for job retention and re-employment and the other compensation for the restriction of activities and support for inflexible running costs.

The Government proposal was amended during parliamentary consideration to extend the eligibility for job retention and re-employment support to agency workers. In addition, the calculation model for the amount of compensation was amended to better take into account seasonal fluctuations when assessing changes in turnover.

The entry into force of the act is subject to approval of the aid scheme by the European Commission. According to a decision of by the Commission, dated on 28 May 2020, the proposed support and compensation for restaurants are in line with the EU’s single market rules.

Detailed instructions to come

Companies in the food and beverage service sector will receive detailed instructions on how to get support and compensation. The instructions will be published no later than the date when the act enters into force on the website of the KEHA Centre. The centre is responsible for granting and paying the support and compensation for restaurants and other food service companies. Its full name is the Development and Administration Centre for Centres for Economic Development, Transport and the Environment (ELY) and Employment and Development (TE) Offices.

The compensation is paid to companies mainly without the need for them to apply for it, in the form of a mass payment on the basis of company-specific VAT information received from the Tax Administration. The first instalment will be paid as soon as possible after the entry into force of the act.

Companies can apply for support for job retention and re-employment by submitting an electronic application. Applications can be submitted as soon as possible after the entry into force of the act.

Inquiries:

Liisa Huhtala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 396 3333