De minimis aid

What it means

De minimis aid is state aid so small that under EU rules it does not distort competition, and so it need not be notified to the European Commission in advance. A single undertaking may receive it up to a ceiling over the last three years set by an EU regulation, with lower ceilings in some sectors.

It may take the form of a grant, a subsidised loan, a guarantee, a waived fee or a tax relief. It does not matter whether the money comes from the state, a municipality or EU funds: all de minimis aid from all providers counts towards the ceiling.

Linked companies count as one undertaking, for example a parent company and its subsidiaries or companies with the same majority owner. The ceiling therefore applies to the whole group rather than each company separately, which differs in detail from the definition of an SME.

How it works in practice

When applying, the company fills in a declaration of de minimis aid received and the provider checks it against a central register. For clients we therefore keep a list of aid received, with date, provider and amount, so that the declaration is complete and nothing goes wrong at an audit.

De minimis aid is attractive because it lacks the strict eligible-cost conditions of other state aid. It often funds smaller projects, consultancy or marketing, and in some calls also support under the recovery plan.

In the books, aid received is recorded according to its purpose: for assets through deferred income, released into income in step with depreciation, and for costs as income in the period the costs arose. For tax, a grant is generally taxable in line with how it is accounted for.

What to watch out for

Exceeding the ceiling, even by a small amount, makes the aid that crossed it unlawful, and it must be repaid with interest. The risk arises mainly in groups, where each company applies on its own and nobody tracks the total for the group.

The three years are counted on a rolling basis back from the day the new aid is granted, not by calendar years. Aid from two and a half years ago therefore still counts, and before each application the company should recalculate how much of the ceiling remains.