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On 17 March 2020 the government has announced additional support measures for the business community. Various measures will be clarified further in time. In principle, the package as currently proposed is valid for three months. Below, we will provide you with a summary of the measures in the current jobs and economy package. As new information becomes available regularly, we will update this memorandum as soon as it comes available.
Update March 20 / Version 2.0 Amendment of the facility for special deferral of payment.
Special deferral of payment
To ensure that entrepreneurs can cope with liquidity problems, there is the option to request for special deferral of payment after an assessment that cannot be paid has been received. The postponement is applicable for income tax, corporate tax, turnover tax and wage tax. In connection with this special postponement of payment, the Tax and Customs Administration will omit or reverse a default penalty for late payment of turnover tax and payroll tax.
Postponement can be requested as soon as you have received a tax assessment. With regard to turnover tax and wage tax, this means that an additional assessment must be imposed. The additional assessment is imposed after the (automatic) determination by the Tax and Customs Administration that the turnover tax or wage tax has not been paid within the payment term.
The Inland Revenue will automatically grant a three-month extension of payment after receipt of the letter in writing that the entrepreneur has run into problems due to the corona crisis. They will then stop the recovery measures.
If postponement for a period longer than three months is desirable, this can also be requested. In that case, the Inland Revenue will request additional information, Specific details on the additional information to be requested will be announced later.
Via the combination of our disciplines in accountancy and specialism in formal tax law, we can guide you through the entire process of special deferral of payment.
Please be advised that the formal obligation to file a tax return timely remains to be applicable in full.
If and when appropriate, a notification of inability to pay must also be made to the Tax Authorities. This must be done within two weeks after the tax debt should have been paid. If the report is late, this has far-reaching consequences for the application of directors' liability. Our advice is not to take any risks on this point.
Recovery interest and tax interest
If an assessment is not paid within the applicable payment term, recovery interest will be charged. In order to facilitate that entrepreneurs easily apply for deferment of payment, the recovery interest will be temporarily reduced from 4% to 0.01% from 23 March 2020 onwards.
In principle, tax interest is charged in the event of a late determination of a tax assessment. The percentage of this will also be temporarily reduced to 0.01%, however, from 1 June 2020. An exception applies to the income tax for which the effective date is 1 July 2020.
Provisional income tax and / or corporate tax assessments for 2020
Entrepreneurs who expect a lower profit due to the corona crisis can request a reduction of the provisional assessment. This can be done in the following ways:
• for income tax due: a change in the provisional assessment can be effectuad via Mijn Belastingdienst.
• for corporate income tax changing the provisional assessment can be done in three ways being:
1. via the form in the new entrepreneur portal: Mijn Belastingdienst Zakelijk.
You can access this via the Log in for entrepreneurs, then choosing Mijn Belastingdienst Zakelijk
and then logging in with eHerkenning.
2. via the form 'Request or change provisional assessment for corporate income tax 2020'
available on the website of the Tax and Customs Administration; or
3. using the commercial software package or your tax adviser's software.
If the amount of the new provisional assessment is less than the tax that already was paid in the first months of this year, the excess amount will be refunded.
Temporary scheme for compensation of labour costs
An entrepreneur who expects a loss of turnover (at least 20%) can apply to the Dutch Social Security Authority (hereinafter UWV) for a salary contribution for a period of three months (maximum 90% of the wage costs, depending on the loss of turnover).
The UWV will provide an advance of 80% of the requested contribution. The payment of the salaries can herewith be continued. This measure also applies to on-call workers. An important condition is that no staff may be made redundant for economic reasons during the subsidy period.
This Temporary Emergency Measure Bridging for Work Retention (In Dutch abbreviated as NOW) will be made available as soon as possible and will replace the current working time reduction scheme. For this latter scheme it is as of per direct no longer possible to submit new applications to the SZW. Applications that have already been made, but not yet settled, will be transferred and handled under the new scheme. Entrepreneurs can apply for this subsidy/allowance for a decrease in turnover as applicable from 1 March 2020.
Our lawyers can inform you further about this legislation and assist you with the application.
Liquidity support (non-fiscal)
An emergency counter will be set up for entrepreneurs who have been directly hit as a result of the governmental measures to combat the corona crisis and who have seen their turnover disappear wholly or largely as a result. This applies for example to catering and beauty salons. They can apply for a grant in the form of a gift comprising of a one-off lump sum payment of € 4,000 for the three-month period to deal with first emergencies.
The requirement is that it concerns companies with a physical layout outside their own home. The conditions for compensation need to be further elaborated and, where necessary, the conditions are constantly being updated.
Extra temporary support for established entrepreneurs, freelancers
Self-employed entrepreneurs with financial problems can make use of a temporary provision for three months that starts as soon as possible. This facility is implemented by the municipalities.
Support may be claimed in the form of an additional subsistence allowance and/or working capital allowance.
The living allowance supplements the income to the social minimum, does not have to be repaid at a later date and amounts to a maximum of approximately € 1500 net per month. The level of income support depends on the income and household composition. In principle, the income support for maintenance can be provided within 4 weeks after submitting the application, for a maximum period of three months. In addition, advances can be paid.
To solve liquidity problems, a working capital loan with a relatively favourable interest rate can be used. An accelerated procedure also applies here, provided that a loan for working capital up to a maximum of € 10,157 is applied for.
Broadening of various credit facilities
Depending on the situation, various credit facilities will be extended. The application for these facilities is made through your financier, usually the bank or, where appropriate, Qredits. Various information must be provided for with the application. Our accountants can assist you with this. We will discuss the specific credit facilities in more detail below.
Broadening the Guarantee for SME loans (BMKB)
Small and Medium entreprises (SMEs) with liquidity problems due to the effects of the corona virus can temporarily count on extra favorable conditions under the BMKB. A new temporary measure increases the size of the surety loan in the BMKB from 50% to 75%. This makes it easier and faster for financiers (in particular banks) to extend credit.
Guarantee Corporate Finance Scheme (GO)
Companies with a healthy future perspective have a safety net through the GO to continue to obtain sufficient financing. With the GO, the government will help both SMEs and (medium) large companies with a 50% guarantee on bank loans and bank guarantees, from € 1.5 million to a maximum of € 150 (was € 50) million per company. This expansion will be effectuated within a week.
Qredits is unique in the Dutch market as a provider of microcredits to start-ups and / or entrepreneurs from small businesses because of an ideal goal and an approach that is fundamentally different from regular banks.
In recent years, Qredits has financed approximately 20,000 small business start-ups and / or entrepreneurs. This type of companies is often characterized by a lack of financial reserves, which means that corona issues could have a disproportionate impact on these entrepreneurs.
For corona-related applications until the end of May 2020, companies will be supported by postponing the repayment obligation for a maximum period of six months, during which an interest discount is also to be offered.
Unemployment insurance premium differentiation
As of 1 January 2020, employers are due a low unemployment insurance premium for permanent contracts and a high unemployment benefit premium for temporary/flexible contracts. This as a result of the Employment Balance Sheet Act (Wab).
This scheme also stipulates that employers must pay the high unemployment insurance premium retroactively for permanent employees who have worked overtime more than 30% in a calendar year.
In sectors where the coronavirus requires a lot of extra overtime (eg healthcare), this rule will have an unintended financial effect and will therefore be adjusted as soon as possible.
To meet the conditions for application of the low unemployment insurance premium, employers were initially given until 1 April 2020 to draw up an employment contract for an indefinite period. Because it will not be practically possible for all employers to meet this requirement in the coming weeks, this period will be extended to 1 July 2020.
For more information about the possibilities in or assistance in your individual situation, please do not hesitate to contact us.
Management and partners Wesselman Accountants | Advisors.
Igor Suselbeek will gladly inform you.