COVID-19 outbreak and various measures – Update March 17,2020

Download the free sample letter (dutch) to use for your deferral of payment at the Tax and Customs Administration!

Hardly a day goes by at present without new COVID‑19 related measures of an economic and fiscal nature being publicised. We have summarised the extensive package of measures the Dutch Cabinet announced on Tuesday, 17 March last so as to ensure that you should have as much relevant information as possible at your disposal concerning the current “state of play”. As some of the government agencies concerned are still working on finalising the requisite (digital) front desk functions, the on-line availability of information is a hundred percent just yet. Of course we will keep you posted via e-mail – as well as via the news column on the our web site – on pertinent developments as and when these occur.

We have awarded top priority to the COVID‑19 measures and would like to inform about the next measures. :

1. Implementation of NOW (Employment Bridging Emergency Fund) scheme

If you are expecting a loss of turnover for your business of 20 percent or more, you have the option of filing an application for a three-month month labour cost allowance with UWV, the Netherlands Employee Insurance Agency (of up to 90 percent of the wage bill depending on your loss of turnover). UWV will advance 80 percent of the allowance you have applied for, which should enable you to continue paying your staff.

Effective date of this measure: after 01 March 2020 where it concerns loss of turnover.
Designated agency: UWV (Netherlands Employee Insurance Agency).
Possible complication: delays due to the fact that UWV and the Ministry of Social Affairs and Employment need to set the wheels in motion (from scratch). As everyone at UWV is pulling out all the stops to get things sorted for you, the organisation’s accessibility by telephone may temporarily leave something to be desired.
(Dos and) Don’ts: you will be prohibited during this period from letting employees go for commercial reasons.
To be dispensed with: there will be no need for you separately to apply for the part-time unemployment benefit scheme (which is anchored in the Short Time Working Act of the Netherlands), as this will kick in as soon as your eligibility for a NOW allowance has ended.
To be rendered verifiable: loss of turnover after 01 March 2020 of 20 percent or more.
– Current NOW information
– UWV

2. Additional support for sole traders

The Cabinet has decided temporarily to launch a liberalised scheme in order to help sole traders (including those who come under the “ZZP” category of self-employed men and women who do not employ anyone other than themselves) stay in business, by making available – using an accelerated procedure – supplementary cost-of-living income support for a three (3) month period, to top up the relevant sole trader’s income to social minimum level without having to be repaid at a later stage. Asset testing and partner income testing do not form part of this temporary income benefit scheme, which alternatively offers support by making available business capital loans at a reduced interest rate.

Effective date of this measure: after 01 March 2020 where it concerns loss of income.
Designated agency: the municipal authorities in your city or town of residence.
Possible complication: delays due to it being up to central government in consultation with the municipalities to get the entire scheme up and running. Please seek out the further particulars by liaising with your local authorities.
To be dispensed with: filing an application for unemployment benefits or laying claim otherwise to social insurance benefits, jurisdiction having consistently borne out that those who have sole trader status are ineligible for admission to any of these schemes.
To be rendered verifiable (by your local authorities): that your COVID‑19 induced loss of income has resulted in your having ended up below social minimum level.
– Central government

Not all municipalities – or central government, for that matter – had (digitally) filled their information channels with the necessary details at the time this e-mail shot was released. We would advise you to keep close tabs on the web site of your municipality of residence.

3. Relaxation of deferral of payment regime cum reduction of default charges

The rules for business owners to apply for deferral of payment have temporarily been relaxed. Having proved to be utterly unusable, the last week’s emergency arrangement has since been overhauled by the Tax and Customs Administration, we are pleased to report, in that applications to be granted deferral of income tax, corporation tax, payroll tax and turnover tax payments can now be made without further ado. On receipt of the application the Tax and Customs Administration will immediately suspend collection of outstanding charges, with the interest on outstanding taxes being reduced to 0.1 percent. Although tardy payments will still prompt penalties being levied, the tax office will refrain from collecting the default charges in question.

Effective date of this measure: immediately, applies to entrepreneurs across the board.
Designated agency: the Tax and Customs Administration.
Possible complication: delays due to the huge influx of applications.
(Dos and) Don’ts: not yet known, the scheme’s unrestricted wording essentially leaves the door open to all entrepreneurs to apply on condition that they should succeed in proving that the COVID‑19 situation is wreaking havoc on them financially. Although no additional repercussions in response to abuse of the scheme have to date been publicised, repercussions have been part and parcel of prevailing regulations for abuse of measures of a fiscal nature.
To be dispensed with: primarily engage in an extensive application process. Such information as has to date been made available warrants the conclusion that all you’d have to do in order to be granted deferral of payment effective immediately is set out your predicament in a letter to the Tax and Customs Administration. The sample letter (dutch) we have prepared for your use for this purpose is also available from the Koppel web site.
Follow-up action to be taken: compile evidence to be used in substantiation of your eligibility for admission to the deferral of payment scheme. We have devoted an entire questionnaire to be used for this purpose, a copy of which we will forward to you on receipt of the copy of your deferral of payment letter to the tax office.
To be rendered verifiable (by the Tax and Customs Administration): that the COVID‑19 situation has warranted your application for admission to the deferral of payment scheme. Deadline for producing evidence: four (4) weeks of the application date would be the customary term. No exceptions or extensions have as yet been publicised where it concerns the COVID‑19 measures in particular.

N.B. (1): It is essential that you should continue promptly and accurately to file the requisite tax returns, as the COVID‑19 pardon will not render you impervious to the (stiff!) penalties that are imposed for tardy and/or inaccurate filing.
N.B. (2): Objection needs to be lodged formally against any sort of penalty in order to safeguard the right to challenge the penalty (penalties) in question. Please provide us with copies of any turnover or payroll tax assessments you may receive that include default charges (we do not automatically receive these from the Tax and Customs Administration).
N.B. (3): Having scrutinised the measures that were publicised yesterday, we have regrettably had to establish that certain essential aspects, such as that of (the scope for dodging) joint and several liability, have not been addressed by the government. Rest assured that we will most definitely take this aspect into consideration as part of the duties we will be performing on your behalf.

Further details are available from the Koppel web site as well as from that of the Tax and Customs Administration.

4. Relaxation of Business Finance Guarantee Scheme (Ministry of Economic Affairs and Climate Policy)

The Business Finance Guarantee Scheme (Dutch abbreviation: “GO”) is there to help out businesses that have a hard time securing bank loans and/or bank guarantees. The Cabinet has proposed temporarily to raise the guarantee ceiling as per the GO scheme from its current level of 400 million euros to 1.5 billion euros. The Ministry of Economic Affairs and Climate Policy through the GO scheme offers a lending hand to SMEs and large enterprises alike by providing a 50 percent guarantee on bank loans and bank guarantees (to a minimum of 1.5 million euros and a maximum of 50 million euros per enterprise). The individual maximum is temporarily being increased to 150 million euros. The Cabinet has undertaken to meet the entire guarantee requirement. Banks are invited to file their applications for admission to the expended loan arrangements (i.e. BMKB, the government-guaranteed scheme for loans to SMEs, as well as GO) with RVO, the Netherlands Enterprise Agency (this being the Dutch Ministry of Economic Affairs and Climate Policy’s implementing organisation), whereas business owners should liaise with their lender of choice.

5. Compensation scheme for affected business sectors (Ministry of Economic Affairs and Climate Policy)

The Cabinet’s health measures are having a particularly brutal impact in terms of revenue on certain business sectors, what with restaurants and bars having been closed down and cancellations being rife in the travel industry. It will moreover be next to impossible to recoup the loss of revenue once the “Corona Crisis” has been overcome. It is against this background that the Cabinet is launching a compensation scheme made up of tailor-made measures for businesses in the most badly affected sectors. The scheme is currently being finalised and will shortly be submitted for the urgent scrutiny of the European Commission as regards its (permissible) state aid content.

6. Reduced interest charge on Qredits-extended microloans to small enterprises (Ministry of Economic Affairs and Climate Policy)

Qredits in its capacity of microloan provider finances and coaches a sizeable community of small businesses and start-ups – in the hospitality industry, retail, the personal care sector, construction and the business service sector, to name but a few of the particularly challenged types of small/start-up business – many of which find it next to impossible to secure a loan with a “regular” bank. Qredits has come up with a temporary emergency measure granting small business owners affected by the COVID‑19 situation a six-month suspension of their repayment obligation on reduction – likewise for six months – to two percent of the interest rate.

Sharing is Caring

It has come to our attention that our previous message in relation to COVID‑19 has been shared with or forwarded to fellow business owners on a massive scale. We have been asked by multiple recipients whether we were okay with this. It is our pleasure to assure you that we have no objection whatsoever to sharing our knowledge, nor will we lay claim to intellectual property rights – such as copyright – or to exclusive rights where this is concerned, it being our firm conviction that it cannot be but beneficial that we should let others in on what we know, in the hope that this will help further the sense of fellowship and unity that is needed more than ever in in times of crisis such as these.

Stay healthy!

Dutch version: COVID-19 en fiscale maatregelen – Update 17 maart 2020