On Thursday 17 November, the Brussels Government approved the first steps of two new aid measures for Brussels companies, shops and the self-employed. In addition, it released an emergency budget for the non-market sector, which is also affected by the crisis.
A COMPENSATORY GRANT SCHEME
The Brussels Government has agreed on a direct aid measure for companies in difficulty that operate in energy-sensitive sectors and that are impacted by rising energy prices (gas and electricity).
"Energy sensitive" economic sectors have been identified as sectors where companies face energy costs at least equivalent to 3% of their turnover.
The sectors most affected are retail, personal services (health care, accommodation, restaurants and cafés, laundries, hairdressers, recreational activities), manufacturing (production activities, food industry, printing) and the Creative and Cultural Industries (CCI). A company's NACE VAT code will determine whether it can access the aid scheme.
In addition to the NACE VAT code, there are other eligibility criteria for accessing the aid scheme.
The company must:
- have a minimum turnover of 50,000 euros;
- have filed its accounts and balance sheet with the NBB for 2021;
- comply with its VAT obligations;
- comply with environmental, social and fiscal obligations;
- agree not to redistribute dividends in the year following the grant.
In practical terms, the aid will cover 30% of the additional costs of the 2022 energy bill when compared with the 2021 energy bill for both electricity and gas.
The amount of the grant is at least €500 and cannot be higher than the extra cost incurred by the beneficiary. The amount is also capped according to the energy sensitivity of the sectors in which the company operates. The grant is capped at €50,000 for companies operating in energy-sensitive sectors and €100,000 for companies operating in very energy-sensitive sectors
The plan is for applications to be submitted in February 2022.
INDEXATION OF COMMERCIAL LEASES: TEMPORARY LIMITATION
This proposal is also one of the measures designed to help companies affected by the energy crisis.
With inflation soaring, in October 2022 rents rose by up to 12.27%. This abnormal indexation of rents has impacted retail tenants in Brussels, hence the importance of introducing a measure to limit the indexation of commercial leases along with the various other protective measures taken by the Region. The objective is to create an air bubble for retailers in difficulty by acting on fixed costs, of which rent is a large part. The measure is therefore intended to ease the pressure on their cash flow and protect many jobs.
The scheme allows the indexation of commercial leases to be limited for one year. The proposed index for calculating the portion of inflation from June 2021 (when energy prices began to rise dramatically) is the consumer price index less energy components (electricity, natural gas, butane, propane, liquid fuels, solid fuels, and motor fuels). This index has increased less rapidly than the health index and therefore limits the increase in commercial rents to a more reasonable level. Based on the current data, this will result in an indexation reduced by approximately half. As an indication, if the scheme was already in force in November, the indexation of commercial leases would be limited to approximately 5.5%.
Given the urgency of the situation, it is proposed that the order be introduced by the parliamentary majority as a proposed order.
EMERGENCY "ENERGY" AID FOR BRUSSELS ASSOCIATIONS
Like businesses and households, rising energy prices are impacting the non-market sector and could put their essential services and projects at risk. Which is why, at the end of 2022, the Brussels Region is releasing 8.7 million euros of emergency aid, followed by 26 million euros in 2023. This is a mechanism for covering some of the additional costs associated with the increase in energy bills for the non-market sectors dependent on the Region, the COCOM, the COCOF and the VGC.
The distribution of resources and the eligibility criteria are used to respond to the specific difficulties of each activity and to take into account the diversity of the subsidised sectors. Associations receiving organic subsidies (under decrees or orders) or recurring (since at least 2021) optional grants above a certain amount are eligible. The Government's decision provides a set of principles for the liquidation of resources by sector.
Given the timeframes, it is proposed that an advance payment (in a single instalment) be made for a period of one year from 1 October 2022. This advance payment will be supplemented, if necessary, based on the "energy" provision decided upon for 2023.
These various measures are explained in more detail on the joint website of Ministers B. Trachte and A. Maron, but 1819 will of course keep you informed on this website and through its newsletter.