58 LEGAL IMPACTS OF COVID-19 IN THE TOURISM INDUSTRY also be converted into other forms of 3.1 TF aid without having to account for it as new aid88. There are few limitations to 3.1 TF aid in State aid rules; Member States can define the terms of aid, including the exact terms of tax advantages, direct grants, guarantees and loans (e.g. they can grant “interest free” loans or guarantees guaranteeing the full loan, which is exceptional in State aid). One constraint is the general exclusion of undertakings in difficulty89 on 31 December 2019. An exception applies to micro and small enterprises, which are eligible for aid under 3.1 TF even if they were in difficulty on 31 December 2019 but, at the time of aid granting, they are not subject to a restructuring plan (due to restructuring aid), a collective insolvency procedure90 under national law or they received rescue aid, which has not yet been repaid (if a loan) or has not yet expired (if a guarantee)91. An example of 3.1 TF aid in the tourism sector is the SA.5929592 case, in which the Commission authorised an Italian scheme that exempted employers (an estimated 238,000 of them) from the contributions they bear on wages in the tourism and thermal bath sectors in order to improve the liquidity situation of businesses and to preserve employment. The measure is not specific as to the period of exemptions, only gives examples to potential beneficiaries and periods. As the Italian authorities agreed to comply with the few restrictions applicable to 3.1 TF aid, it was given green light by the Commission to grant exemptions from employer’s contributions in the sector. It should be mentioned that the same measure could have been implemented as a wage subsidy measure under Section 3.10 TF, but as wage subsidies (tax exemptions) can also be introduced as a 3.1 TF measure without requiring the beneficiary to maintain the number of employees, the Commission authorised the notified measure. Another Italian measure in the tourism sector approved by the Commission under 3.1 TF was in the SA.59590 case93, another example for the many possible uses of 3.1 TF aid. The beneficiaries of the measure were undertakings carrying out the sale of goods and services in historic city centres of Italy (and thus 88 Point 23ter of the Temporary Framework. 89 Point 22(c) of the Temporary Framework. The definition of undertakings in difficulty is included in Article 2(18) of the General Block Exemption Regulation. 90 Procedures according to Annex A of regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings, OJ L 141 5.6.2015. 91 Points 22(c) and 22(c-bis) and footnotes 21 and 22 of the Temporary Framework. 92 Commission decision C(2020) 8036 final of 16 November 2020 (SA. 59295 (2020/N) COVID-19: exemption from social security contribution payments for private employers in the tourism and thermal bath sectors engaging with fixed-term contracts). 93 Commission decision C(2020) 8702 final of 3 December 2020 (SA.59590 (2020/N) COVID-19: Contribution for economic and commercial activities in historic centres).
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