What does the term ‘de minimis aid’ mean?
When it comes to grants, it is common to think of them as an umbrella concept for any type of funding received. However, as we go through the process of applying for a grant, we can look at the different types of grants we can obtain and we often come across clauses linked to a crucial requirement that could put our application in jeopardy: the question of whether we have exceeded the limit set for de minimis grants.
For companies and freelancers venturing into the world of grants for the first time, this requirement does not represent any obstacle. But what if we have already applied for financial support in the past, and how can we determine whether this support qualifies as de minimis aid?
First of all, it is important to highlight that this requirement does not apply to all subsidies equally, being more frequent in those related to European Funds. This is because Spain, as a member of the European Union, is subject to regulations that guarantee the correct functioning of the common market.
What is de minimis aid?
The term de minimis aid, which comes from the Latin for ‘small things’, refers to cumulative subsidies whose amounts do not exceed limits that the European Commission considers capable of disrupting trade in the European market. In short, this means that the amount of subsidies received is not subject to a specific limit, unless they exceed a revenue threshold that could confer a competitive advantage over other companies. This includes direct subsidies, loans and interest deductions on bank loans.
According to the European Regulation it is stipulated that over a period of three years (the current tax year and the previous two years), the total amount of such aid must not exceed 200,000 euros. This applies to self-employed persons and companies, including SMEs, but the limits vary according to the sector in which they operate:
- For transport companies the limit is set at EUR 100,000.
- For enterprises involved in fisheries and aquaculture the limit is 30,000 euros, provided that the total amount of aid granted to the enterprises is less than 2.5 % of the annual national production of the sector.
- And for enterprises involved in the primary production of agricultural products the limit is EUR 20,000.
How can I calculate the amount of aid received?
As mentioned above, these subsidies are cumulative, so it is necessary to calculate the total amount of subsidies received directly. In the case of grants in the form of loans, the purpose of which is to finance a business or project and which are expected to be repaid within a specific period of time, the calculation is made on the basis of the gross grant equivalent, usually provided by the granting entity.
To avoid these calculations, the National Grants Database can be accessed to obtain a detailed report of all grants received.
With this we can understand what these types of grants are and how they work, although in order to know the conditions and their compatibility, it is advisable to consult experts in order to be well informed and to have financial solutions that are customised to the context of the entity.