COVID-19 subsidies: Austrian Supreme Court of Justice (OGH) confirms previous interpretation of aid ceilings

In its decision 1 Ob 23/26b, the Austrian Supreme Court of Justice (OGH) has confirmed the previous interpretation of the COVID-19 subsidy ceilings: The term “an undertaking” within the meaning of EU state aid law and the State Aid Temporary Framework does not refer to individual legal entities, but to the economic unit as a whole. Therefore, for affiliated companies, the entire company group must generally be taken into account.

In the specific case, the plaintiff mainly argued that there was legitimate expectation of legal certainty based on previous national subsidy regulations and their interpretation. The OGH rejected this argument. According to the OGH, a legitimate expectation of the lawfulness of aids exceeding the ceilings approved under EU law cannot generally be derived from national regulations. In particular, any possible national legitimate expectation cannot override the EU’s obligation to reclaim unlawful aid.

Therefore, the known state aid ceilings remain in place:

• EUR 2.3 million for aid under section 3.1 of the Temporary Framework – applicable to the entire company group;
• EUR 12 million for aid under section 3.12 of the Temporary Framework – also applicable to the entire company group and not per individual company.

Companies that have exceeded these ceilings within the company group could, under certain conditions, apply for a state aid-compliant reclassification until 31 October 2024 (Austrian Ceiling Regulation published – reclassification of COVID-19 subsidies exceeding the ceilings now possible in company groups).

Implications in practice

Increased checks of COVID-19 subsidies are still to be expected – this is also reflected in our practical experience. Companies should therefore review the subsidies they have received, especially within company groups, to ensure compliance with state aid ceilings and timely assess any potential risks of reclaim.