ANNOUNCEMENT 27 Jul 2021

In July 2021, the European Commission approved a French state aid measure to continue support companies in the context of the COVID-19 pandemic.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

SA.62999 COVID-19: Aid in the form of exemptions from social security contributions («Régime d'aides sous forme d'exonérations de cotisations sociales »). Available at: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_62999

Subject: State Aid SA.62999 (2021/N) – France COVID-19: Aid in the form of exemptions from social security contributions (« Régime d'aides sous forme d'exonérations de cotisations sociales »). 27/07/2021. Available at: https://ec.europa.eu/competition/state_aid/cases1/202131/295809_2303772_24_2.pdf

Inception date: 27 Jul 2021 | Removal date: 31 Dec 2021

Tax or social insurance relief

On 27 July 2021, the EU approved a EUR 8.4 billion (approx. USD 9.9 billion) French state aid scheme to provide social security benefits to companies in the context of the COVID-19 pandemic.  

The scheme provides two types of support, including exemptions from employer’s social security contributions. Beneficiaries are divided into two groups: companies with up to 250 employees operating in the tourism, hotel, restaurant, sport, culture, air transport and event sectors, and companies of less than 50 employees that are closed to the public due to the lockdown measures. Support can be granted until 31 December 2021. 

In this context, the European Commission’s Decision highlighted that “The measure is liable to distort competition, since it strengthens the competitive position of its beneficiaries. It also affects trade between Member States, since those beneficiaries are active in sectors in which intra-Union trade exists”.

Regardless, the Commission approved the state aid without raising objections, concluding that the measure is compatible with the internal market pursuant to Article 107(3)(b) of the TFEU.

The state aid is approved under the Temporary Framework under the State Aid and its amendments of 2 April 2020, 13 October 2020 and 1 February 2021. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March 2020 (see related state act).

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 27 Jul 2021 | Removal date: 31 Dec 2021

Financial grant

On 27 July 2021, the EU approved a EUR 8.4 billion (approx. USD 9.9 billion) French state aid scheme to provide social security benefits to companies in the context of the COVID-19 pandemic.  

The scheme provides two types of support, including grants for supporting the employer in the payment of its social security obligations. Beneficiaries are divided into two groups: companies with up to 250 employees operating in the tourism, hotel, restaurant, sport, culture, air transport and event sectors, and companies of less than 50 employees that are closed to the public due to the lockdown measures. Support can be granted until 31 December 2021. 

In this context, the European Commission’s Decision highlighted that “The measure is liable to distort competition, since it strengthens the competitive position of its beneficiaries. It also affects trade between Member States, since those beneficiaries are active in sectors in which intra-Union trade exists”.

Regardless, the Commission approved the state aid without raising objections, concluding that the measure is compatible with the internal market pursuant to Article 107(3)(b) of the TFEU.

The state aid is approved under the Temporary Framework under the State Aid and its amendments of 2 April 2020, 13 October 2020 and 1 February 2021. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March 2020 (see related state act).

 
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