France – Energy-intensive businesses: you will continue to enjoy financial support through December 31, 2023
The French Government will continue to provide financial aid to your company until December 31, 2023 to help you pay your gas and energy bill. In November 2022, they once again simplified the eligibility requirements to support you more effectively.
CALCULATION OF THE AMOUNT OF THE GRANT
Depending on the gas and electricity price hike that your company has been experiencing, it may qualify for the following amount of grant:
A grant that equals 50% of the difference between your company’s 2021 energy bill increased by 50% and the energy bill of the application period capped at EUR4 million.
The energy consumption variation thus computed is limited to 70% of the 2021 consumption. Whether your company’s earnings before taxes, depreciation, and amortization (EBITDA) is down or it incurs an operating loss is now irrelevant in determining your company’s eligibility.
A grant that equals 65% of the difference between your company’s 2021 energy bill increased by 50% and the energy bill of the application period capped at EUR50 million.
The energy consumption variation thus computed is limited to 70% of the 2021 consumption. Your company must also meet the following requirements:
- Its EBITDA must be negative or down by 40% over the period that you’re applying for the grant.
- It must have experienced an increase of at least 50% of its energy price over the period that you’re applying for the grant compared to the average price that it paid in 2021.
- It must have incurred 2021 energy expenses of more than 3% of its 2021 revenue or first half of 2022 energy expenses of more than 6% of its first half of 2022 revenue.
A grant that equals 80% of the difference between your company’s 2021 energy bill increased by 50% and the energy bill of the application period capped at EUR150 million.
The energy consumption variation thus computed is limited to 70% of the 2021 consumption. Your company must also satisfy what is required from businesses that may qualify for a subsidy of up to EUR50 million (negative EBTDA or down by 40%…).
BUSINESSES THAT ARE ELIGIBLE FOR THE FINANCIAL AID
Your requirements
Your company must meet the following requirements to qualify for the financial aid:
- Be formed or incorporated before December 1st, 2021.
- File its taxes in France as a resident of France for income tax purposes.
- Be an energy-intensive business. For this purpose, your company’s gas / electricity purchases in 2021 taxes included but deductible VAT excluded must represent more than 3% of your 2021 sales.
- Must have experienced a 50% increase of the gas and/or electricity price during the eligible period compared to a 2021 average price.
Your restrictions
To be eligible for financial assistance, your company must not:
- Be in bankruptcy filing proceedings, legal redress, or judicial liquidation.
- Have any payroll tax or income tax liabilities balance due as of December 31, 2021. Tax liabilities that you paid while you were in the process of filing your application for subsidy or that you are paying by installment as part of a payment plan agreement are not tax liability for the purposes of qualifying for the grant.
- Be formed or incorporated in the French Overseas territories (COM). This Government measure is not applicable in the COM.
Specific structures
- Nonprofit: it must be subject to commercial business taxes or employee at least one worker to be able to apply for the “gas and electricity” aid.
- Businesses that are eligible for the company buffer: if your business is a very small business (TPE) with an electricity meter with a power greater than 36 kVA or a small and medium-sized business (SME), it will qualify for the subsidy for its 2023 electricity bills.
- Group of companies: if your company is part of a group of companies, the amount of the financial support is based on the Group’s consolidated financial information.
Level of energy consumption
Your company may qualify for the “gas and electricity” aid if its gas and or electricity expenses account for more than:
- 3% of its 2021 revenue.
- 6% of its first half of 2022 revenue.
- 3% of its revenue of the eligible period (or over one of the 2 months) in 2021.
BUSINESSES THAT ARE NOT IN THE SCOPE OF THE GRANT PROGRAM
Your company is not eligible for the grant program if its main activity include any of the following:
- Electricity or heat production.
- Banking transactions.
TERMS, CONDITIONS & SUPPORT
Effective date
You may start implementing the new grant program from the period September-October 2022.
You may submit grant application under the previous grant program for the periods March-April-May and June-July-August 2022. As part of this superseded grant program, your company may qualify for a grant of up to EUR2, EUR25 and EUR50 million.
Application deadline
You may submit your application through your online business tax account. Your company must submit its application for the “gas and energy” aid within the following timeframe:
How we may help
The French Government requires that a French certified public accountant determine whether your company qualifies for the program and, if so, estimate the amount of subsidy that your company may claim. Aimlon CPA P.C. can guide business owners through the process.
As part of its economic and social resilience initiative, the Government set up the “gas/electricity financial support known as Aide Energo”. The goal is to support financially energy-intensive businesses that have been severely impacted by the energy price spike.
Soaring electricity and gas prices has been the first consequences of the war in Ukraine. They have already significantly increased in 2021. For example, on March 7 2022 electricity and gas prices were as follows:
• Gas: EUR224.6/MWh compared to EUR46/MWh in 2021.
• Electricity: EUR540/MWh compared to EUR109/MWh in 2021.
The energy price spike has heavily impacted energy-intensive industries and businesses. They include businesses that are in a highly competitive global market and highly competitive industries.