In order to help the sectors most weakened by the Covid-19 crisis, the Government has modified several rules relating to social contributions.
1- Granting of a partial exemption of employer’s contributions due for the period of 1st
February to 31 May 2020 for companies with less than 250 employees who carry out their main activity either (art. 65, law 2020-935 of July 30th, 2020):
- “In sectors relating to tourism, hotels, restaurants, sports, culture, air transport and events particularly affected by the economic and financial consequences of the spread of the covid-19 pandemic“. Examples include hotels, pubs, cafeterias, cinemas, film screenings, travel agencies, sports club activities, rail and sea passenger transport, etc. ( 1, decree n°2020-1103 of September 1, 2020);
- “In companies whose activity depends on the above-mentioned sectors and which have suffered a sharp decline in their turnover“. Article 1 of the decree of 1st September 2020 specifies the activities concerned, such as the production of ciders, beer and cheese, the wholesale of fruit and vegetables, dairy products, beverages, frozen products, textiles, clothing and footwear, the distribution of cinematographic films and book publishers, etc. Article 2 of the decree subordinates this exemption to a decrease in turnover of at least 80% between 15 March and 15 May 2020 or, when this decrease compared to the same period of the previous year represents at least 30% of the turnover for the year 2019.
2- This exemption also applies to employers with less than ten employees whose main activity
is in sectors other than those mentioned above but which involves receiving the public and which has been interrupted due to the pandemic. This exemption applies for the period of 1st February to 31 May 2020.
Employers can, until 31 October 2020, regularize their social declarations in order to benefit from the exemption.
3- In addition, employers eligible for the exemption measure would be able to obtain assistance in the payment of their social security contributions equal to 20% of their income declared for the period defined above.
4- Finally, the SME which don’t qualify for the above exemptions may apply for a partial exemption of their social security contributions payroll for the periods of activity from 1st February to 31 May 2020, which may not exceed 50% of the sums due for this period and which will be proportionate to the size of the decline in turnover (art. 65 VII law 2020-935 of July 30, 2020).
To obtain this reduction, several conditions must be fulfilled, such as having fewer than 250 employees, having suffered between 1st February and 31 May 2020 a reduction in activity of at least 50% compared to the same period in 2019, concluding a settlement plan and to be compliant with all other contributions.