New round of COVID 19 support measures
The measures aimed at combating the corona virus are continuing to have a significant economic impact. The Dutch Cabinet in the run-up to the first of October as the expiry date of the current package of support measures has launched its third consecutive support and recovery package for entrepreneurs and workers. This has been designed to extend into 2021 and is based on a three-pronged approach in which the provision of support, the facilitation of the process of acclimatisation and investment are designed to reinforce one another.
The Cabinet has decided to extend several of the support measures that are currently in force beyond the first of October 2020. Although the criteria to be met have been revised and the amounts in compensation reined in, the term of the measures themselves has been extended, which has rendered the new package more long-term oriented than either of its predecessors. The Cabinet moreover is implementing new measures aimed at encouraging businesses to invest more in economic growth, as well as deploying additional resources aimed at providing the victims of COVID‑19 related redundancy with training and coaching to improve their chances of securing alternative work.
The measures that make up the third package run to approximately 11 billion euros in additional expenditure augmented by 1.5 billion euros in accelerated investments, all of this separately from the Cabinet’s investments as announced on the occasion of the State Opening of the Dutch Parliament on 15 September last.
Corona-prompted schemes for entrepreneurs and employees effective 01 October 2020
NOW (Employment Bridging Emergency Fund) scheme
The NOW scheme is being extended by a further nine months divided into three periods of three months each, in the course of which it will gradually be phased out to give entrepreneurs and workers enough time and space to acclimatise.
TOZO (Temporary Income Support) scheme
The TOZO bridging measure for the self-employed is likewise being extended by a further nine months. The date of expiry has now been set at 30 June 2021. An “available means test” forms part of the scheme. With effect from the first of January 2021 municipalities are to offer (re) training, refresher and reorientation courses and other extra services to the self-employed community.
TVL (Fixed Cost Compensation) scheme
The tax-exempt allowance is being deployed afresh, with the three-month maximum per business being raised to 90,000 euros. Similarly to the NOW scheme, the TVL scheme is being extended by a total of nine months divided into three periods of three months each, in the course of which it will gradually be phased out to give entrepreneurs and workers enough time and space to acclimatise.
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Government-guaranteed schemes, loans and guarantee funds
The availability of additional, extended or eased up lending schemes and guarantees aimed at ensuring the liquidity adequacy of SMEs (i.e. the BMKB‑C, GO‑C and KKC schemes) is being extended beyond the first of October 2020.
Entrepreneurs have until the first of October 2020 to (re) apply for deferred payment of their turnover and/or payroll and/or corporation taxes until the first of January 2021, in addition to which they will be given a total of two years to pay off their tax arrears. The temporary reduction in interest on overdue tax to just shy of zero percent is to be extended until year-end 2021, to avoid entrepreneurs incurring greater costs than is strictly necessary.
Deferred payment of taxes until 01 January 2021, generous repayment scheme for entrepreneurs
Entrepreneurs have the option until the first of October 2020 to file their application for (renewed) tax payment deferral until the first of January 2021 at the latest. This has been done to stop the amount in outstanding taxes for repayment increasing by more than is strictly necessary. Given the importance of ensuring that entrepreneurs should not belatedly end up in dire financial straits owing to their having to pay off their outstanding taxes, the Cabinet has fixed the term of the repayment scheme at an altogether benevolent two years. (Re) Assessment of measures being additionally implemented or tightened up will take place if and when corona virus trends warrant such a step being taken.
Repayment scheme and possible customisation
Rather than having to see to the repayment of their tax arrears at breakneck speed, entrepreneurs are to receive a repayment scheme offer from the Tax and Customs Administration for a fixed monthly instalment to be paid over the period to the first of January 2023. If the two-year period turns out not to be long enough for the entrepreneur in question to manage, he or she in consultation with the Tax and Customs Administration will look into the possibilities for a customised approach based on the existing policy. Of course it will be possible for entrepreneurs to repay their tax debt at an accelerated rate if they so choose.
Extension of temporary reduction in interest on overdue tax
The temporary reduction in interest on overdue tax to just shy of zero percent is to be extended until year-end 2021, to avoid entrepreneurs incurring additional costs over and above the tax debt they will by then be in the process of repaying.
The interest on tax is to be restored to the level of 4 percent, as a rate which serves as an incentive to the tax payer promptly to file the requisite returns. The interest rate on corporation tax, which customarily amounts to 8 percent, is to be halved to 4 percent until year-end 2021, to avoid entrepreneurs facing steep on-the-spot charges.
Several other tax-related schemes having been prompted by the COVID‑19 onslaught – such as that relating to mortgage forbearance – will remain in full force until the first of January 2021. A new measure has been added to the existing package ensuring continued commuting allowance entitlement for employees who normally commute to and from work using public transport where their employer does not provide for such travel allowance including where the employees in question are currently working from home, all of this on condition that the actual costs should not have changed.
New measures geared to investments
The Cabinet moreover has developed several new measures aimed at furthering investment, with the ultimate object of boosting economic growth. Public investments of an infrastructural nature (among other things) to a sum total of 2 billion euros are being accelerated, with the Cabinet additionally investing in a national scale-up facility (to the tune of 150 million euros) as well as setting aside 300 million euros in order where appropriate to participate in a private-sector equity fund that may be launched with the aim of recapitalising (medium-sized to) large businesses.
The Cabinet has earmarked 150 million euros for boosting the fund assets of the ROMs (Regional Development Agencies), to enable the latter to provide innovative SMEs with the proverbial shot in the arm in a financing sense, as well as having freed up a total of 255 million euros towards the co-funding of EU programmes aimed at regional development, innovation, sustainability and digitisation.
Supplementary social package
Unfortunately some people over the coming months will have no choice but to look for alternative employment owing to their having been made redundant, whereas others will be keen to swap their current position for a job that offers them more scope going forward. Keen to help these people succeed, the Cabinet has set aside funds for having UWV (the Employee Insurance Agency) and the municipalities provide job seekers with coaching, as well as freeing up more money for (re) training and refresher courses for job seekers. Those who are particularly vulnerable when the economy is in the doldrums – such as adolescents and persons having work disability status to whom the national work placement scheme applies – will be given extra help. The Cabinet moreover is keen to ensure that those who are at high poverty and problem debt risk should receive help. All in all it has set aside a total of just over 1 billion euros to be spent on this supplementary social package.
Dutch version: Nieuwe ronde corona-steunmaatregelen