Extensive fiscal and economic measures due to the corona virus
On Tuesday 17 March, the cabinet announced an extra package of fiscal and economic measures. These support measures are mainly aimed at Dutch entrepreneurs and self-employed persons. In this way, the cabinet is trying to prevent companies from going bankrupt and employees being hit hard financially. The most notable measures are the temporary scheme for the compensation of labor costs, a reduction of the collection and tax interest to practically 0 percent and the (immediate) replacement of the short-time working scheme by a contribution to the salary costs. Most of the measures apply for the next three months, if necessary an extension is possible. In this article we will further discuss the announced measures due to the corona virus.
Temporary scheme for compensation of labor costs
The current scheme of the short-time working scheme will be withdrawn with immediate effect. The scheme will be replaced by the temporary Emergency Measure Bridging for Retention of Work (NOW). If you expect a loss of turnover of at least 20% as an entrepreneur, you can apply for a contribution to wage costs from the UWV for a period of three months. Depending on the loss of turnover, the compensation is a maximum of 90% of the wage bill. The condition for the payment of such an allowance is that you may not fire personnel for business reasons. The temporary NOW will be opened as soon as possible and will therefore replace the current short-time working scheme.
Tax reduction and collection interest
Recovery interest is normally charged after the expiry of the payment term on the assessment. The amount of the recovery interest will be temporarily lowered from March 4, 2020 from 4% to 0.01%. This applies to all tax debts. The tax rate is also reduced to 0.01%, this applies to all taxes for which tax rate applies. For comparison, this is normally a rate of 8% for corporate tax and 4% for all other taxes. For technical implementation reasons, this reduction will take effect from 1 June 2020. However, the income tax applies from 1 July 2020.
Deferral If you have run into problems due to the corona crisis, there is, under certain conditions, the possibility of requesting special deferral of payment. As a tax advisor, we can request a special deferment of payment for you. This special deferral of payment is possible for income tax, wage tax, turnover tax and corporate tax. The postponement is granted if it is a motivated payment problem due to the corona crisis. In addition, a statement must be sent from a third expert. This statement should demonstrate that:
- Talk about actual existing, acute payment problems (and not, for example, about payment problems that will arise in the future). Problemen Payment problems are temporary.
- The customer solves the payment problems before a certain time.
- The company is viable.
A third expert is understood to mean an external consultant, an external financier, an industry organization, an accountant or financial advisor. The statement of a third expert does not have to be sent immediately. The statement must be submitted within 2 weeks after the request for special postponement has been requested.
UPDATE: Meanwhile there has been an update regarding deferment of payment. Read our article on update deferment of payment here!
Decrease the provisional assessment
In addition to deferral of payment, a lower profit expectation also allows entrepreneurs to adjust the provisional assessment. We can help you with this. If you have a lower profit forecast due to the corona crisis and you want to adjust the provisional assessment (or have it adjusted), please do not hesitate to contact us.
Support independent entrepreneurs
There will be a temporary relaxed arrangement to support independent entrepreneurs, who are also self-employed professionals. The cabinet wants to ensure that companies can continue to do so. The temporary arrangement will be carried out by the municipalities. The self-employed can receive additional income support for living expenses through an accelerated four-week procedure. In principle, this applies for a period of three months. The scheme ensures that the income is supplemented to the social minimum and does not have to be repaid.
There is no asset or partner test for this temporary measure. In addition, support can be provided by means of a loan for working capital, up to € 10,157. This serves to solve temporary liquidity problems. A lower interest rate will apply and the repayment obligation may be deferred.
Postponement of energy tax / ODE
The Cabinet wants to temporarily postpone the levying of energy tax and / or the levying of Sustainable Energy Storage for companies in the second, third and fourth tax bracket. It is not yet known how this will be designed, more about this will follow later.
Tourist tax and culture sector
The Cabinet intends to enter into consultation with the Association of Dutch Municipalities (VNG) about the possibility of ending local attacks on entrepreneurs and withdrawing imposed assessments on companies. This mainly concerns the tourist tax. In addition, the government is in consultation with the culture sector to be able to link up with the generic measures and any specialization if necessary.
Temporary guarantee for agricultural and horticultural companies
For agricultural and horticultural companies, a temporary guarantee for working capital will be opened soon under the Guarantee for SME Agricultural Credits (BL) scheme. This guarantee ensures that the cabinet guarantees the loans of farmers.
Closing The letter
“Emergency package for jobs and the economy” mentions a few further compensatory and expanding measures for, among others, the catering and travel industry, interest on microcredit and the Guarantee for Corporate Finance. If you have any questions regarding these support measures, you can always contact us. We can provide you with further information on this.