Coronavirus: Dutch fiscal and financial measures for companies
The Dutch government has announced a number of measures to limit the financial and economic consequences of the corona virus for businesses. Below you can read which measures currently apply.
Special deferral of payment
If you can demonstrate that the corona virus has caused payment problems for your company, you can ask the Dutch Tax Administration for a deferral of payment for income tax, corporate income tax, VAT, wage tax, gaming tax, excise duties, tax on alcohol free drinks, insurance tax, landlord levies, energy tax and other environmental taxes and comparable taxes as levied in Dutch Caribbean territory.
You can therefore submit a written request, or submit the request for deferral of payment online through a special form which can be found on the website of the Dutch tax authorities, upon receipt of the first (additional) tax assessment. After receiving your request the tax authorities will halt all collection measures. Also, under certain circumstances, you can apply for unblocking of your G-account. A G-account is a frozen account that you can use solely to make wage tax and VAT payments to the Dutch tax authorities.
The deferral of payment applies for a period of three months. This period can be extended with a new period of three months. For the request for the second term of special deferral of payment, a statement must be provided by a third expert, such as your accountant or a tax service provider. Please note that such a statement does not have to be provided in case the total tax liability does not exceed € 20.000.
When the extension is granted, any penalties received for non-payment or late payment of wage tax or VAT do not have to be paid. If you nevertheless received a penalty, the penalty will be reversed.
Please note that you still are required to fill all tax returns timely.
Lastly, as of 23 March 2020 the normal collection interest rate for paying after the payment term has passed has been decreased temporarily to from 4% to 0.01%. This applies to all taxes. As such no hefty interest needs to be paid.
Request for reduction of provisional assessments
Do you expect a lower profit, or even loss, of your business due to the corona outbreak and are you now paying a provisional income tax or corporation tax assessment? Then you can change your provisional assessment so that you immediately pay less tax. Lower your income for this.
Requests to change your provisional assessment must be submitted electronically. We are happy to assist you in adjusting provisional assessments.
The tax authorities lower the interest rate for the late payment of your taxes to 0.01%. This applies to all taxes for which a late payment of taxes interest may be due. The changed interest rate enters into effect for all taxes, except the personal income tax as of 1 June 2020. The interest rate for the personal income tax will be lowered to 0.01% as per 1 July 2020.
Employment Bridging Emergency Fund (NOW)
The existing Working Time Reduction ruling (WTV) is revoked. In its place the temporary measure Employment Bridging Emergency Fund (NOW) is established.
Under the NOW the government will subsidize the salary obligations of the employer up to a maximum of 90%. The financial support will be granted for three months, which period can at least be extended once with another three months. The central requirement is that the entrepreneur has plausible arguments that – as per March 1st, 2020 – a decrease in turnover of at least 20% can be expected.
An essential condition will be that during application of the subsidy the employer will not apply for dismissal of employees on economic grounds. The further conditions for the NOW scheme in the context of the Dutch emergency package for companies are as follows:
- Calculate revenue loss
How do you calculate your loss in turnover as a result of corona?
Compare 1 / 4th of the annual turnover 2019 with the turnover (expected) for March-April-May 2020. If a decrease of more than 20% can be derived from this, you are eligible for the NOW scheme.
If this period is not representative (eg because your turnover is highly seasonal), you can also take the turnover (expectation) from the period 1 or 2 months later as a starting point.
- How are labor costs calculated?
The reference period for the wage costs will (in principle) be the first month of 2020. The payroll information is derived from the UWV’s (Executive Institute for Employee’s Insurances) own systems. There is an upper limit to the individual salary to be taken into account of € 9,538, the salary above this threshold is not taken into account for the calculation of the subsidy. The wage costs are calculated using a fixed multiplier of 1,3 times the salaries.
The application procedure for NOW will have a shorter lead time than the WTV procedure. The emergency measure will also apply for employees on a zero-hour contract.
Broadening the guarantee for SME loans (BMKB)
From 16 March 2020 to 1 April 2021, the SME credit guarantee (BMKB) scheme will be extended to help SMEs that are affected by the coronavirus secure bank guarantees and bridge financing. This measure will make it easier and faster for banks to extend credit.
The government estimates that with this first step, € 300 million in additional financing is immediately available for entrepreneurs who are affected by the corona outbreak. With this measure, the guarantee runs from 50% to 75% of the credit given by the financing party. A number of other conditions are also being relaxed.
Mitigation of financial and tax consequences of coronavirus
These tax and other regulations offer opportunities to mitigate the financial and tax consequences of the corona virus for companies and entrepreneurs.
Do you want to know which measures are relevant for you and your company? Please contact our tax advisors. They follow developments closely and are happy to assist you.