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Dutch Tax And Financial Measures To Counter COVID-19
The Dutch government has announced a number of measures to limit the financial and economic consequences of the Corona virus for businesses. Below a summary of measures that currently apply.
Employment Bridging Emergency Fund (NOW)
The existing Working Time Reduction ruling (WTV) is revoked and replaced by the temporary measure Employment Bridging Emergency Fund (NOW). Applications for this measure can be filed via the NOW application desk, up to and including 31 May 2020.
Under the NOW measure, the government will subsidize the salary costs of an 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 1 March 2020, a decrease in turnover of at least 20% is 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 NOW emergency measure applies to employees on fixed, flexible and zero-hour contracts.
The loss of revenue and totale wage/salary costs for the employer during the reference period are key determinators for calculating the NOW subsidy granted by Dutch government.
Special deferral of tax payments
If it can be demonstrate that the Corona virus has caused payment problems for the business, you can request 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.
After receiving the first (additional) tax assessment, a written or online request for deferral of payment could be submitted to the Dutch tax authorities. All collection measures will then be paused.
The deferral of payment initially applies for a period of three months. This period can be extended with another three months, subject to providing a statement by a third party expert, such as an accountant or tax service provider, in case the total tax liability exceeds € 20.000.
Please note that all tax returns still need to be filed timely.
As of 23 March 2020, the normal collection interest rate has been decreased temporarily from 4% to 0.01%. This applies to all taxes. As such no hefty interest is charged on late payments.
Request for reduction of provisional assessments
If lower profits or even losses, due to the Corona outbreak, are to be expected, provisional assessments can be changed by lowering the income for the year concerned. Less taxes are then to be paid. Requests to change provisional assessments must be submitted electronically.
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 Corona virus - secure bank guarantees and bridge financing. This measure will make it easier and faster for banks to extend credits.
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 tax and financial consequences of the Corona virus
These above measures offer opportunities to mitigate the tax and financial consequences of the Corona virus for companies and entrepreneurs.
Do you want to know which measures are relevant and feasible for you and your company? Feel free to contact Hans de Kruijs. Hans and his team are happy to assist you.
Hans completed his studies at Leiden University, and has served as a tax consultant at international consulting firms since 1990. Hans has also completed a variety of management courses and specialised courses for tax professionals. Hans has worked as an international tax advisor at BOS VAN DER BURG since 2012.
Hans has advised clients in many sectors, including the IT and telecommunication, oil and gas, distribution and logistics, sport, and media sectors. He is also regularly invited to speak at international tax conferences.