Coronavirus measures

In recent weeks, we have seen much change on the streets in the Netherlands as a result of the coronavirus. In efforts to limit the spread of the highly contagious virus, more and more shops are closing and people are being advised to go outside as little as possible and to keep a safe distance from one another. This has meant that, despite the fact that some employees are able to continue working from home, many entrepreneurs are seeing a sharp decrease in their revenue. In the meantime, the Dutch government is working hard to keep the Dutch economy, as well as the Dutch population, healthy by means of support measures. In this blog, we will discuss those recently announced emergency measures that are of importance to entrepreneurs.

Salary allowance for employers

Initially, the Cabinet chose to introduce the Working Time Reduction scheme. This support measure has since been withdrawn and replaced by the Temporary Measure Bridging for Employment (NOW). In short, this emergency measure means that for a three-month period an allowance can be provided for up to a maximum of 90% of the wage bill (depending on the loss of revenue). Under certain conditions, a further 3-month extension can also be requested. One can apply for this allowance through the Employee Insurance Agency (UWV), provided that certain conditions are met.

There are obviously a number of conditions for receiving the NOW allowance. A decrease in revenue of at least 20% should be expected from March 1, 2020; no staff may be made redundant for economic reasons during the period of the allowance, and 100% of wages must continue to be paid to employees during the period of the subsidy. An auditor’s report will also be required for applications above a yet to be determined amount of the allowance.

The level of the allowance will be determined based on the extent of the expected loss of revenue. Below you will find a table covering the amount of the allowance towards wage costs.

Income support for freelancers

In addition to the NOW, there is also the Temporary bridging scheme for independent entrepreneurs (Torzo). This scheme applies to self-employed entrepreneurs, including self-employed persons. The Torzo is an additional income support for living expenses. Income will be supplemented up to the social minimum and does not have to be repaid, rendering it a donation from the government. Depending on the applicant’s income and household situation, monthly income support can amount to a maximum of € 1,503.31 per month. For this scheme, you need to resort to the local municipality. Support is also available in the form of a working capital loan at a reduced interest rate. Furthermore, the Torzo does not involve an asset or partner test.

Flat rate compensation for affected branches

A special scheme has been created for entrepreneurs who no longer have any income as a result of government measures to combat the corona crisis. Under this scheme, entrepreneurs can apply for a subsidy of € 4,000 from the Netherlands Enterprise Agency (RVO). This concerns companies that have had to call a halt to their activities as a result of the government measures taken to limit the spread of the corona virus. The full extent of the conditions of this scheme have not yet been made public. As soon as this happens, the conditions will be published on the RVO website. There will also be an overview of companies that are eligible for the flat-rate compensation.

Tax Authorities’ measures

A special 3-month deferment of payment can be requested from the Tax Authorities for all income tax, corporate tax, VAT and payroll tax assessments. Entrepreneurs and freelancers with payment problems due to the corona virus are eligible for this. Upon receipt of the assessment, a letter should be sent to the Tax Authorities requesting deferment of payment.

In addition, the Tax Authorities have taken a number of further measures. Default penalties for late payment of VAT or payroll taxes will not have to be paid. Interest on tax will be reduced from 4% to 0.1% for all taxes for which interest on tax is charged from 1 June 2020. Income taxation is an exception to this, as the measure for this will only take effect on 1 July 2020. Recovery interest is also being reduced from 4% to 0.1%. Finally, less tax may also be due in the first instance as a result of lowering the provisional income tax or corporate tax assessment. A necessary condition for this is that less profit is expected than is estimated in the provisional assessment.

In addition to the above, there are some further measures that we have not dealt with in this blog. Would you like to find out if your company is eligible for one of the government measures? If so, why not contact a tax consultant?

Corona measures with regards to VAT

If you would like to have more information about the measures taken specifically for VAT-regulations, please refer to this blog written by our VAT-specialist.

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