COVID-19: Dutch tax measures, update 23 May
Extension and expansion of emergency package for jobs and the economy
The government announced on Wednesday, 20 May 2020 an extension and an expansion of the emergency measures related to the coronavirus. These measures follow the first emergency package (March 17) and various interim economic arrangements. All new or extended regulations, with any adjustments, can be found in the Letter to Parliament Emergency Package 2.0. Below, we provide an overview of a number of these measures, for which more than 13 billion euros have been budgeted.
1. Extension and adjustment of salary compensation scheme (NOW)
The current NOW scheme will expire on 31 May 2020. The government has decided to extend the NOW scheme in an amended form by three months.
An entrepreneur who expects at least a 20% loss of turnover can apply for a contribution towards wage costs from UWV for June, July and August from 6 July 2020. This allows companies to continue paying their staff. The extended NOW scheme applies the same system of compensation, but the new scheme also contains changes.
The fixed (flat-rate) surcharge is increased from 30 to 40 percent. The NOW also contributes to costs other than labor costs. The reference month for the wage bill will be March 2020. In addition, in the current NOW scheme, March is also taken as the starting point if the wage bill in March-May is higher than in January-March. This is important for companies with seasonal income fluctuations. Furthermore, a company that uses the NOW for this year may not make a profit distribution to shareholders, pay bonuses to the board and management, or buy back own shares.
In NOW 2.0, the correction to the subsidy on dismissal will continue to apply, but the subsidy will no longer be reduced further in the event of commercial dismissal. With the new NOW application, companies state that they consult with unions if they want to apply for business dismissal for more than 20 employees. This is in line with the regulations concerning collective dismissals. The legal protection in case of dismissal also remains in force.
Employers who apply for the NOW are obliged to encourage their employees to take additional training and retraining. Employers make a statement about this when applying for NOW 2.0.
If desired, we are happy to support you in applying for the adjusted NOW scheme.
2. Prolongation of tax measures
The period in which affected entrepreneurs can apply for a deferral of payment of taxes has been extended to 1 September 2020. Any default penalties for late payment do not have to be paid. The tax and recovery interest for all tax assets has been reduced to 0.01% until October 1, 2020. Other tax measures, such as a relaxation of the hour criterion for self-employed persons and the payment break for mortgage obligations, will also be extended until 1 September 2020.
Entrepreneurs immediately receive a three-month extension of payment with the first application. For those three months, they only need to submit a request once (for a deferral of all tax types). Entrepreneurs can also apply for an extension for a period longer than three months. It is important that as much money as possible really stays in the companies. In order to guarantee this extra, entrepreneurs must postpone for more than three months that they do not pay dividends and bonuses, or buy back their own shares.
If desired, we are happy to support you in applying for a tax deferral, but also in other tax measures, such as forming a corona reserve in your corporate income tax return 2019.
3. Corona lending and guarantees to entrepreneurs (BMKB, GO, KKC, COL)
The extra, extended or more accessible lending and guarantees to small and medium-sized companies, start-ups, and scale-ups from the first emergency package are still continuing. In this way, these companies also maintain or gain access to, for example, bank financing. These are the corona modules of the Guarantee Small and Medium-sized Enterprises Scheme (BMKB) and the Guarantee Corporate Finance Scheme (GO), the new Small Credit Corona Guarantee Scheme (KKC) and the increased budget of the SEED Capital scheme.
The Corona Bridging Loan (COL) that contributes to improving the liquidity position of innovative companies (start-ups and scale-ups) will receive a second tranche of 150 million euros due to the large number of applications submitted.
If desired, we are happy to support you in requesting a credit application.
If you would like assistance of more information, please do not hesitate to contact us.