Corona Support Measures
Corona Support Measures
Government measures to help businesses affected by the corona virus (update February 2021)
1. (Extension of) Temporary Emergency Bridging Measure for Sustained Employment (in Dutch the ‘Noodfonds Overbrugging Werkgelegenheid’ (“NOW”)
First round of NOW (NOW 1.0)
Entrepreneurs who expected a drop in revenue of at least 20% due to the coronavirus could apply for a compensation of their salary costs with the Employee Insurance Agency (‘Uitvoeringsinstituut Werknemersverzekeringen’, “UWV”) for a period of three months. The decrease in revenue of at least 20% had to occur during a period of 3 months, starting on the first day of the months of March, April or May 2020. It had to concern an uninterrupted period of 3 months. The revenue during this period (referred to as: ‘the measurement period’) would then be compared to 25% of the revenue for the calendar year 2019.
Salary costs consisted of the gross salaries plus the employer’s costs (social security contributions). The maximum compensation was 90% of the total salary costs. The percentage depended on the drop in revenue and was assessed on an individual basis. For example: in the case of a 50% drop in revenue due to corona, 90% of this 50% would be compensated, so: a compensation of 45% of the total salary costs. On the receipt of an application, the “UWV” would provide 80% of the requested compensation in advance. This advance was based on the salary bill for the tax return period “January 2020” and was paid within two to four weeks after the receipt of the application. If no salary data were known for this period, November 2019 would be started out from. In this way, employers could continue to pay their employees’ salaries. Salaries in excess of EUR 9,538 gross per month were not eligible for compensation. Employers who made use of the NOW scheme also received a compensation for the monthly accrual of the holiday pay, in addition to the compensation of their salary costs. In the first NOW round, the salary sum would be increased by 30% for the accrual of holiday pay, pension premiums and employer’s contributions.
The most important conditions for this scheme were:
- The drop in revenue had to be at least 20%*.
- Staff could not be dismissed on economic grounds**.
- When the NOW was determined in retrospect, an auditor’s report or statement from a third-party expert could have to be submitted for the definitive determination of the compensation.
- If you received an advance of more than EUR 100,000 or a fixed compensation of more than EUR 125,000, an auditor’s report was required.
- If you received an advance of more than EUR 20,000 or a fixed compensation of more than EUR 25,000, a statement from a third-party expert was required. A third-party expert is, for instance, an external consultant, external financier, industry organization or accountant/tax advisor. Holthaus Advies could of course also prepare this statement as a registered tax advisor.
- If no auditor’s report was required, the check would be made on the basis of the books and records.
- The employees’ salaries had to be paid for 100% (so the net salaries); this did not apply to the payment of wage tax to the tax authorities. This payment could be postponed, see point 2).
Please note that the “NOW” scheme also applied (in contrast to the unemployment benefit during short-time working) to employees with zero-hour contracts, employees hired through payrolling companies or temporary staff.
How to apply
Applications for the first NOW round could be filed from April 6, 2020 up to and including May 31, 2020.
*In principle, this concerned the employer’s revenue. However, in the case of a group of companies, the drop in revenue would be measured at (international) group level. This could be beneficial for Dutch companies which do not generate any revenue themselves (for instance because they acted as cost center), but which are financed by a foreign group company and have employees in the Netherlands. Individual operating companies of a group experiencing a drop in revenue of 20% or more, however, could also apply for NOW, even if the drop in revenue at group level was not 20% or more. In this case, however, additional conditions applied.
**There are also other options to save staff costs. Some examples:
- Contracts with flexible workers can be ended.
- Fixed-term contracts do not have to be extended.
- Indefinite-term contracts can be terminated by mutual consent on the basis of a settlement agreement whereby the employee is entitled to unemployment benefits.
- Employment agreements can be cancelled before the start of or during the trial period.
Position of director/majority shareholder (“DMS”): On March 27, 2020 it was announced that a DMS was not eligible for the “NOW” scheme unfortunately. The DMS could, however, make use of the “Tozo” support scheme (for more on this see 3. below). Only directors for whom social security contributions are paid satisfied the conditions for the “NOW” scheme. This also applied to shareholders with a non-controlling interest in an operating company who worked in the company for which the continued salary payment scheme applies.
Second round of NOW (NOW 2.0)
The government announced that the NOW scheme would be extended by a period of four months. With effect from July 6, 2020, entrepreneurs could apply for NOW for the months of June up to and including September. The return period for the wage tax on which the second round of the NOW scheme was based is March 2020. If the wage bill for March was higher than the wage bill for January, March was also used as the return period for the first NOW application. The difference was then calculated when the NOW payment was definitively determined. A salary in excess of EUR 9,538 gross per month did not qualify for compensation.
The most important conditions for being able to claim under this scheme were the following:
- The loss of revenue had to be at least 20%. The loss of revenue had to occur during a period of four consecutive months. If payment under the NOW scheme had already been claimed, the new period had to directly follow the earlier chosen period.
- Staff had to receive payment for 100% (so their net wage); this did not apply to the payment of wage tax to the tax authorities. That payment could be deferred, see point 2).
- As opposed to the earlier NOW scheme, staff could be dismissed, subject to certain conditions, on economic grounds. In the case of applications for a larger number of employees (more than 20), an amount of 5% of the total NOW payment would be withheld, unless employers had reached agreement about the application for dismissal with the trade unions. In the case of an application for dismissal for a larger number of employees, the trade unions also had to be informed and a statement had to be submitted to the effect that the employer had made sufficient efforts to provide staff with retraining. To support this, the government had made a budget available, with which retraining and development advice could be followed online, free of charge, from July onwards.
- When determining the NOW amount in retrospect, an auditor’s report or statement from a third-party expert could be necessary for the definitive determination of the compensation.
- If you received an advance of more than EUR 100,000 or a fixed compensation of more than EUR 125,000, an auditor’s report had to be submitted.
- If you received an advance of more than EUR 20,000 or a fixed compensation of more than EUR 25,000, a statement from a third-party expert was required. A third-party expert is, for instance, an external consultant, external financier, industry organisation or accountant/tax advisor. Holthaus Advies could of course also prepare this statement as a registered tax advisor.
- If no auditor’s report was required, the check would be made on the basis of the books and records.
- For situations in which an auditor’s report was required, no dividends could be paid to shareholders for the year 2020, no bonusses could be paid to directors and no shares could be redeemed, if payment under the second NOW scheme was being claimed.
Employers who made use of the NOW scheme would also receive a compensation for the monthly accrual of the holiday pay, in addition to a compensation for the salary costs. The salary bill was increased by a 30% upcount for the accrual of the holiday pay, pension premiums and employer’s contributions in the first NOW round. In the second NOW round, this upcount was increased to 40%.
Third round of NOW (NOW 3.0)
At the end of August, the government announced that the NOW will be extended by three periods of three months each. This means that the NOW has been extended until June 30, 2021. During these three periods, the compensation will be gradually reduced.
- Period 1 (1 October 2020 up to and including 31 December 2020): in this period the compensation amounted to a maximum of 80% of the total salary costs. Salaries in excess of EUR 9,538 gross per month were not eligible for compensation in this period. In this period the NOW compensation could be applied for if the loss of revenue was at least 20%.
- Period 2 (1 January 2021 up to and including 31 March 2021): in this period the compensation will amount to a maximum of 85% of the total salary costs. Salaries in excess of EUR 9,538 gross per month are not eligible for compensation in this period. In this period, the NOW compensation can be applied for if the loss of revenue is at least 20%.
- Period 3 (1 April 2021 up to and including 30 June 2021): in this period the compensation will amount to a maximum of 85% of the total salary costs. Salaries in excess of EUR 9,538 gross per month are not eligible for compensation in this period. In this period, the NOW compensation can be applied for if the loss of revenue is at least 20%.
If you did not make use of NOW 2.0, you could choose for NOW 3.0 which periods you would like to be used for the revenue comparison (i.e. from 1 October, 1 November or 1 December). This was helpful in particular if the loss of revenue was concentrated around the December holiday period.
Please note that it is not possible to choose the revenue comparison period if you have received NOW 2.0.
As opposed to the first and second NOW rounds, it is permitted for entrepreneurs to reduce their salary bills by a certain percentage in the third NOW round without resulting in a reduction in the NOW compensation:
- in the first period, the salary bill could be reduced by a maximum of 10%.
- in the second period, the salary bill may be reduced by a maximum of 10%.
- In the third period, the salary bill may be reduced by a maximum of 10%.
The salary bill can be reduced in different ways: by not renewing fixed-term contracts, by laying off staff or through a voluntary salary reduction (‘salary sacrifice’). Please note that a voluntary salary reduction requires the employee’s consent. It is advisable in this case to record the arrangements that have been made in writing and to keep them in the employee’s personnel file.
Just as in the first and second NOW rounds, a number of conditions remain unchanged. For instance, if an application is submitted, 80% of the requested compensation will be granted as an advance. In addition, employers will receive a compensation for the monthly accrual of the holiday pay, pension contributions and employer contributions in addition to the compensation of the wage costs. This upcount amounts to 40%. The ban on dividend payments to shareholders, bonus payments to directors and the redemption of shares will continue to exist. The same applies to employers’ obligation to endeavour to (re-)train their employees. There has been so much interest in the training program ‘NL leert door’ (the Netherlands keep learning) that applications for 2020 can no longer be made. As of 2021, a new budget will be made available for the crisis programme ‘NL leert door’.
Would you like to apply?
Applications for the first period of NOW 3.0 could be submitted from 16 November 2020 until 27 December 2020. The definitive determination of NOW 3.0 will take place in the summer of 2021. For applications for the second period of NOW 3.0, the aim of the UWV is that access to the scheme will be opened on 15 February 2021. Applications can be submitted until 14 March 2021.
Definitive determination of NOW
If the NOW compensation was applied for in the first round and an advance was received, the definitive determination of the NOW could be requested with effect from 7 October 2020. If no auditor’s report is required, the definitive determination must have been requested prior to 24 March 2021. If an auditor’s report is required, the definitive determination must have been requested prior to 30 June 2021. The UWV will then have 52 weeks to process applications. For NOW 2.0, it is expected that requests for a definitive determination can be made with effect from 15 April 2021.
When determining the NOW amount in retrospect, an auditor’s report or statement from a third-party expert may be necessary for the definitive determination of the compensation.
- If you received an advance of more than EUR 100,000 or a fixed compensation of more than EUR 125,000, an auditor’s report must be submitted.
- If you received an advance of more than EUR 20,000 or a fixed compensation of more than EUR 25,000, a statement from a third-party expert is required. A third-party expert is, for instance, an external consultant, external financier, industry organisation or accountant/tax advisor. Holthaus Advies is of course also allowed to prepare this statement as a registered tax advisor.
- If no auditor’s report is required, the check will be made on the basis of the books and records.
When determining the NOW compensation, an efficiency threshold of EUR 500 applies. That means that a NOW repayment will only have to be made, if the overpaid subsidy exceeds EUR 500. It is possible to contact the UWV to arrive at a payment arrangement.
2. Relaxation of postponement of tax payment and reduction of fines and interest
Entrepreneurs who experience financial difficulties as a result of coronavirus can ask the tax authorities for a special postponement of their tax payments until 1 July 2021. Please note that this is a postponement, not a waiver of the tax payment.
The taxes to which the postponement applies include:
- Personal Income tax*
- Corporate Income tax*
- Wage Tax
The government had reduced the collection and tax interest to 0.01% until 1 October 2020. The tax collection interest will continue to be 0.01% until 31 December 2021. The tax interest, however, was increased to 4% again with effect from 1 October 2020. This will apply until 31 December 2021 to all types of tax, so also to Corporate Income Tax (normal tax interest rate: 8%). Fines will be remitted only if a request for a postponement of payment has been submitted. Please note that “old” default penalties will not be remitted. Remission will apply only to new default penalties caused by financial difficulties as a result of coronavirus.
The tax authorities are now looking at whether an arrangement for the remission of tax debts must also be introduced. More information on this will follow.
How to request postponement
For Personal and Corporate Income Tax you will receive the assessment concerned after you have filed the tax return. For the Wage Tax and VAT, you will receive an additional assessment if you have failed to pay the tax within the normal period. Unfortunately, it is not possible to submit a request for postponement to the tax authorities before you have received the (additional) tax assessment. The deadline for requesting the postponement is 1 July 2021.
A three-year repayment schedule will be introduced, in the period from 1 October 2021 to 1 July 2024. Faster repayment is of course possible.
*Amendment of preliminary tax assessment 2020/2021
In addition to applying for postponement of payment, it is also possible to amend your preliminary personal or corporate income tax assessment for 2020 or 2021. This preliminary assessment can be changed via the online environment of the Dutch Tax Authorities. Feel free to contact us if you need any help with amending your preliminary assessments for 2020 or 2021.
3. (Extension of ) “Tozo” (Temporary benefit for self-employed professionals)
First round of Tozo (Tozo 1)
In order to support self-employed professionals, the government presented a scheme with effect from March 1 last allowing self-employed professionals to receive income support to pay for their cost of living. Via an accelerated procedure, self-employed professionals could receive income support for a period of three months. This could happen in two ways:
- A maximum of three months of income support up to the social minimum. This support did not have to be repaid. Self-employed professionals could top up their income during a period of three months to EUR 1,050 net per month. If both partners were entrepreneurs, a maximum amount of EUR 1,500 net per month applied.
- In addition, a maximum loan of EUR 10,157 for business capital could be applied for. The maximum term of this loan has been extended to 3.5 years. No repayments have to be made on the loan until 1 July 2021.
The level of the income support in the form of a top-up (1.) or a loan (2.) depended on the income and family composition. When applications were dealt with, no viability, partner or wealth test applied any more.
Who is considered as self-employed professional for the purpose of Tozo applications?
- One-man business (in Dutch: ‘eenmanszaak’): the owner.
- Partnership (in Dutch: ‘VOF’): every partner (provided every partner agrees).
- Limited partnership (in Dutch: ‘CV’): every partner (silent partners, however, are excluded).
- Private limited liability company (in Dutch: ‘BV’): the director/majority shareholder (in short: a shareholder with a controlling interest, so more than 50% of the shares).
- Firm: every partner, if labour and capital are contributed. If only labour is contributed, a partner could only apply for the Tozo top-up (variant 1).
- Cooperative society: every member (provided every other member agrees).
- Foundation: the person who has control over the foundation, makes a financial contribution and runs risks and also works for the foundation. This person must also be considered as entrepreneur for income tax purposes.
Does any of these legal forms apply to you?
The above entrepreneurs who satisfy the hours criterion were eligible for Tozo. The hours criterion means that a minimum of 1,225 hours per year must be spent on the business (approx. 24 hours per week). Another requirement is that the business must have been started before 17 March 2020.
Entrepreneurs who had reached pensionable age could also apply for Tozo. This concerned a loan for business capital at a reduced interest rate. The expansion of Tozo also applied to frontier workers and healthcare workers. If an entrepreneur lives in the Netherland, but runs a business which is registered abroad, he/she could apply for Tozo income support for a maximum of EUR 1,050 net per month. If an entrepreneur does not live in the Netherlands, but has a business which is registered in the Netherlands, he/she could apply for the Tozo loan for business capital with the municipality of Maastricht. Healthcare workers could also apply for Tozo, if the earnings paid to them by healthcare insurers and municipalities were insufficient.
How to apply
Tozo had to be applied for via the municipality in which an entrepreneur lives. This meant that the conditions to be satisfied and the application methods could differ from one municipality to the next. Tozo applications were assessed on an individual basis. Applications could be filed from March 30, 2020 up to and including May 31, 2020 using DigiD.
Please note that if you applied for income support, but succeeded in generating revenue again, this had to be reported to the municipality. Municipalities will also check the revenue generated during the income support period in retrospect. The generated revenue will be settled with the received income support at the time of the final settlement.
Extension of Tozo (Tozo 2)
The government extended the Tozo scheme by four months, up to and including September 30, 2020. For an extension, however, the entrepreneur had to declare that no moratorium of payment had been granted (deferment of payment granted by a court of law) and that bankruptcy was not imminent. When the Tozo was extended, the “partner test” changed. As opposed to the earlier Tozo scheme, the partner income was considered when Tozo was granted. The entrepreneur and his/her partner had to provide a statement to the effect that the household income had dropped under the social minimum of EUR 1,050 due to corona.
The income support could consist of both an income supplement and a loan. Entrepreneurs who already applied for income support in the form of a loan previously were entitled to a new loan in the second round.
Final determination of Tozo
If Tozo has been applied for, municipalities are now asking for a profit statement. The profit statement must set out the profit during the period of Tozo. It is possible to change the period of Tozo compensation when you’re filing the profit statement. Please note that the profit statement is mandatory. Failure to submit it may mean that the received Tozo benefit must be repaid.
Extension of Tozo (Tozo 3)
The government has extended the Tozo arrangement by nine months, viz. until 30 June 2021. The earlier announced means test will not be introduced after all.
How to apply
Tozo can now be applied for via the municipality.
4. SME credit guarantee scheme (Borgstelling MKB Corona “BMKB-C”)
Small and medium businesses that experience financial difficulties due to coronavirus can also use the SME credit guarantee scheme (“BMKB-C”). They can apply for credit (a loan) from a credit provider, such as a bank, in which case the government will guarantee a part of the loan. This should make it easier for credit providers to grant loans. This credit can then be used by businesses in order to bridge the period during which they are losing revenue or production due to coronavirus. The credit guarantee can be applied for by entrepreneurs if they employ no more than 250 workers and have a maximum of EUR 50M in revenue per year. If a credit is granted under the SME credit guarantee scheme, an application fee will be charged to the entrepreneur. This application fee has been reduced from 3.9% to 2%. In addition, the term of the loan has been extended to four years. As a result of this extension, credit providers should provide loans more readily.
The government intends to extend the period within which this credit must be applied for until the end of 2021.
Applying for the credit guarantee: Applications for credit can be submitted to credit providers (such as banks). The credit providers will then ask RVO for approval.
There is a different scheme for larger companies: the Business Loan guarantee scheme (‘Guarantee Ondernemingsfinanciering-regeling’ or “GO”).
5. Emergency counter (“TOGS”)
An emergency counter was set up allowing certain entrepreneurs to receive compensation in the form of a once-only gift of EUR 4,000. This budget was intended as first relief for entrepreneurs who had been immediately affected by the government measures and therefore saw their revenue fall. Applications had to comply with the following conditions:
- The company should have been established and registered with the Dutch Chamber of Commerce before 16 March 2020.
- The company should have had a physical establishment other than at the home address of the owner(s).* An exception applied to catering and itinerant trade (such as driving schools, taxi transport and market traders): their business address and home address could be the same.
- The company could not have more than 250 employees.
- During the period from 16 March 2020 up to and including 15 June 2020, the fixed costs for the main or secondary activities were expected to be EUR 4,000.
- The activity should have been registered under any of the required ‘SBI’ numbers before 16 March 2020. The eligible ‘SBI’ numbers can be found here. You’ll find your ‘SBI’ number on your Chamber of Commerce extract. The government expanded the list of SBI codes so that more entrepreneurs could apply for the relief offered by the Emergency Counter. If any registered secondary activity came under the selected ‘SBI’ code, support could also be claimed under the “TOGS”; the decision to grant support was no longer based on the registered main activity only.
* If, however, you had substantial periodic expenses, but your business was registered at your home address, you could still be eligible for the Emergency Counter. In that case a statement had to be provided to prove that your business had a certain minimum size.
How to apply? Applications for this compensation of EUR 4,000 could be submitted to RVO (the Netherlands Enterprise Agency) until 26 June 2020 via the RVO website. Applications had to be made through ‘eHerkenning’ or ‘DigiD’. Following the receipt of the application, the compensation would be approved and paid within 1 to 3 weeks. In the application, a bank account number registered in the name of the business had to be filled in.
6. Postponement of loan repayments to banks
Dutch companies with a loan up to EUR 2.5 million may receive a six-month extension of the repayment of their loans. This applies to loans from ABN AMRO, ING, Rabobank, de Volksbank and Triodos Bank, among others.
How to apply?
The Dutch Union of Banks (‘De Nederlandse Vereniging van Banken’ or ‘NVB’) requests you to approach your bank if necessary in this respect.
7. “COL” (Corona Bridging Loan) for startups and scale-ups
The government has also enabled startups, scale-ups and other innovative companies affected by the financial consequences of the coronavirus to apply for (bridging) credit. The Regional Development Companies (in Dutch: ‘Regionale Ontwikkelingsmaatschappijen’ or ‘ROMs’) will provide these credits at the request of the government. ROMs invest mainly in innovative and fast-growing regional companies and restructure industrial sites. They provide venture capital to entrepreneurs and can even become a shareholder in these companies. They also assist entrepreneurs in their business operations and encourage them to set up their business in their region. The government has made available EUR 300 million for start-ups and scale-ups.
Companies can apply for a loan ranging from between EUR 50,000 and EUR 2 million at an interest rate of 3%. The loan is not intended to be used for the repayment of other loans. The scheme is intended to serve as extra financial capacity for a company. If a loan of more than EUR 250,000 is applied for, there is a duty to co-finance as shareholder or other investor for at least 25%. The loan must be repaid within 3 years; during the first year no repayment has to be made. COL loans can be applied for until 30 June 2021.
8. Rent deferral and/or remission
To what extent the consequences of coronavirus are at the tenant’s risk will obviously depend on the circumstances of the case and on the further agreements made between the parties. Although a landlord has no strict obligation to take measures against coronavirus, it may be desirable to take measures that limit the damage nevertheless. In general, a tenant could rely on one of the two following legal grounds:
- Force majeure: force majeure in principle releases a debtor (in this case the tenant) from his obligation (i) to perform the agreement, if this is not possible, whether temporarily or permanently, and (ii) to pay compensation. Performance (in this case: the payment of the rent) can be considered impossible if, for example, the imposed government measures prohibit performance;
- Unforeseen circumstances: the corona crisis is extremely exceptional. It is not unlikely that courts will decide that the extremely disruptive effects of coronavirus and the government measures on the rental relationship go beyond a tenant’s normal business risk and can therefore be characterised as “unforeseen circumstances”. This could lead to an amendment or termination of the tenancy agreement or to a renegotiation of the current agreement.
- Fixed travel allowance and working from home
In general, a travel allowance may not be granted untaxed to employees if they work from home for longer periods of time. It has been decided that despite the increase in the number of days that employees work from home, an employer may pay the travel allowance untaxed until 1 April 2021. An employer is therefore allowed to start out from the employees’ travel pattern on which the allowance was originally based. An employer may of course also opt to only reimburse the actual travel costs incurred by employees. Please note that this applies to allowances that were already being paid to employees prior to 13 March 2020.
10. Decreased VAT rate for gyms
When gyms offer online sports lessons, the reduced VAT rate of 9% may be used again. This measure also applied during the earlier closure of gyms.
11. Holiday allowance
What are the rules for paying the holiday allowance when the employer faces financial problems due to corona?
Employees are entitled to a minimum holiday allowance of 8% of their gross annual salary during the past year. The main rule is that an employee is entitled to the payment of the holiday allowance in the month of June at the latest. The parties can deviate from this time of payment by written agreement, for instance in a collective labour agreement, staff guide or individual contract of employment.
However, the employer must still pay the holiday allowance at least once every calendar year.
Given the current financial difficulties faced by many employers, it may be advisable to pay the holiday allowance at a later time. Paying the holiday allowance later than agreed, however, does require the employee’s consent. Our advice is that the agreements you make should be recorded in writing and kept in the employee’s personnel file.
What if the employee does not agree to a later payment of the holiday allowance?
Employers must allow for the fact that employees can demand payment, if employers fail to pay the holiday allowance in time. In that case employers run a risk. If the holiday allowance is not or not timely paid, then the statutory increase will become due. Under Dutch employment law, an employer’s failure to pay in time entitles the employee to demand a statutory increase on account of delay. This increase applies to all monetary remunerations and so also to the holiday allowance and holiday pay (i.e. the continued salary payment to employees when on holiday).
12. Customary salary for directors/majority shareholders
The customary salary scheme provides (in short) that a director/majority shareholder (DMS) must pay a minimum salary per year. This minimum amounted to EUR 46,000 gross in 2020 and will amount to EUR 47,000 gross in 2021. If entrepreneurs are faced with a loss of revenue as a result of coronavirus, a lower salary may be paid temporarily in proportion to the loss of revenue. Please note that the salary may not be decreased with retroactive effect in respect of any salary already enjoyed. The further conditions for this measure will be announced by the government at a later stage.
13. Postponement of Excessive Lending Act (for directors/majority shareholders)
The effective date of the Excessive Lending Act has been postponed until 1 January 2023. This Act serves to cap loans between directors/majority shareholders (DMS) and their BVs at EUR 500,000 (excluding debts for owner-occupied properties).
14. ‘Fiscal corona provision’ for corporate income tax purposes
If a BV realised profits in 2019, a loss incurred in 2020 can only be offset in 2021. This scheme, however, is now being relaxed: a ‘fiscal corona provision’ may be formed out of the profit in 2019 and deducted for corporate income tax purposes. This provision may not exceed the profit in 2019. With this scheme losses can be offset earlier than in 2021.
Even if the corporation tax return for 2019 has already been filed, a new tax return may be filed in which the fiscal corona provision is included.
15. Increase in employment costs scheme
For the employment costs scheme, a once-only increase from 1.7% to 3% applies to the first EUR 400,000 of the employer’s salary sum. The employment costs scheme allows employers to pay employees an untaxed allowance. This increase is intended to enable employers to offer their employees extra support in these challenging times.
16. Relaxation of hours criterion
Entrepreneurs can claim the ‘entrepreneur’s deduction’ in their personal income tax return, provided they comply with the hours criterion (among other conditions). The hours criterion means that at least 1,225 hours per year (approx. 24 hours per week) are spent on the business. To prevent that entrepreneurs who work less due to the corona crisis lose their right to the tax relief, the hours criterion was relaxed. This relaxation has been extended and applies for the period from March 2020 up to and including June 2020. During this period the tax authorities will assume that entrepreneurs satisfy the hours criterion, even if that is not actually the case.
17. Mortgages and mortgage applications
Banks are also prepared to help out if there is less financial room temporarily to comply with mortgage obligations due to a loss of income. It is possible to ask your credit provider for a payment holiday (for interest and repayment). In the case of mortgages with a repayment obligation, the loan repayment arrears may be immediately spread over (a part of) the remaining term of the loan. The period within which the payment holiday can be applied for has been extended. The entitlement to the tax deduction for mortgage interest will continue during the payment holiday. Please note that this will only apply if a payment holiday has actually been agreed with the mortgage provider. The mortgage provider will assess the request for a payment holiday for your mortgage payments.
Moreover, if you have applied for a mortgage, the bank may ask you for a so-called corona statement, which will provide the bank with insight into the impact of corona on your business. With this statement banks wish to reduce the risk that the monthly mortgage charges cannot be paid.
18. Postponement of income tax return filing
The Tax Authorities understand that it may be more difficult for people to ask for help with their personal income tax return during this corona crisis. This is why a postponement for filing the 2019 personal income tax return was granted automatically until 1 September 2020 for people with a ‘DigiD’ authorisation code. The ‘DigiD’ authorisation code remained valid during this period.
Please note that this measure does not apply to entrepreneurs, tax payers who have already applied for a postponement and tax payers who already filed their tax return or did not receive an invitation to file a tax return.
19. Expansion of budget for SEED Capital Scheme
The SEED Capital Scheme is intended to help innovative companies to obtain venture capital. Private entrepreneurs and the government have joined forces by providing loans to promising startups and scale-ups in technological and creative fields. In view of the corona crisis, the budget for this scheme will be expanded with EUR 32 million. Please note that use can only be made of this expansion if the application was submitted in the first quarter of 2020. This means that it is no longer possible to submit new applications.
20. “KKC” (Corona Small Credit Guarantee Scheme)
In addition to the other credit possibilities, the Corona Small Credit Guarantee Scheme has also been presented. This scheme is intended for all credits from EUR 10,000 up to a maximum of EUR 50,000. The government will then guarantee 95% of the entire credit. The credit is intended as bridging financing.
To apply for the KKC, the following conditions must be met:
- The turnover amounts to more than EUR 50,000 per year.
- The business must have been registered with the Chamber of Commerce on 1 January 2019.
- The maximum term of the loan is 5 years.
- The interest rate will not exceed 4% per year. For the conclusion of the loan a closing fee of 2% applies.
Do you want to apply? This credit facility has not been opened yet. Just like the other credit possibilities, entrepreneurs will be able to submit applications for KKC shortly to the usual credit providers (such as banks). ABN AMRO, ING, Rabobank, Triodos and Volksbank have in any event promised they will provide loans via this scheme. The credit providers will then apply for approval from RVO (Netherlands Enterprise Agency).
Summary of credit possibilities
Several credit possibilities have now been introduced: BMKB-C, GO, COL and KKC. Below a short overview of the various credit possibilities is given:
- BMKB-C (point 4.): entrepreneurs can apply for it, if they have a maximum of 250 employees and their annual turnover does not exceed EUR 50 million per year. The level of the loan is capped at EUR 1.5 million.
- GO (point 4.): this scheme applies to larger companies. With the GO scheme, a minimum of EUR 1.5 million and a maximum of EUR 50 million can be borrowed.
- COL (point 7.): this scheme is intended for startups, scale-ups and other innovative companies. With COL, a loan between EUR 50,000 and EUR 2 million can be applied for.
- KKC (point 20.): with KKC, a loan between EUR 10,000 and EUR 50,000 can be applied for.
21. Coaching in the case of corona problems
The “OKB” (Stichting Ondernemersklankbord) offers free coaching for entrepreneurs facing corona problems. The foundation employs some 300 volunteers who coach entrepreneurs during a period of six months. The Chamber of Commerce is the first point of contact for information and advice. The OKB can offer further coaching and advice.
Do you want to apply? You can register for coaching via the OKB website.
22. “TOFA” (temporary bridging scheme for flexible employees)
The TOFA scheme provided for a fixed compensation for flexible employees. Another requirement was that the employee was not entitled to any other support measures.
When did the entitlement to TOFA exist? If a minimum of EUR 400 was earned in February, TOFA could be claimed. This allowed employees to receive a top-up of EUR 550 per month gross for the months of March up to and including May 2020. The maximum income for April 2020 could not exceed EUR 550 gross. Please note that this compensation is considered as salary and will therefore also be taxed. It is no longer possible to apply for TOFA. The application period was closed on 27 July 2020.
23. “TVL” (contribution towards fixed expenses for small and medium-sized businesses)
First round of TVL
For small and medium-sized businesses that were hit hardest by corona, the government introduced “TVL”: a contribution towards the fixed expenses for small and medium sized businesses. The sectors covered by TVL include: the hospitality and recreation industries, gyms, events, podiums and theatres.
These companies received a contribution towards their fixed expenses, depending on the size of the business, the level of the fixed costs and the degree of the loss of turnover. This compensation did not exceed EUR 50,000. For the award of this compensation, the SBI codes applicable to TOGS (point 5.) were linked up with. In addition, the loss of turnover had to be at least 30%.
The other conditions were taken over from the existing TOGS scheme:
- The business had to have been established and registered with the Chamber of Commerce before 16 March 2020.
- The business had to have a Dutch branch.
- The business had to have a physical establishment outside the entrepreneur’s home. For hospitality companies and itinerant trade (such as driving schools, taxi transport and market traders) an exception applied: the business address could be the same as the home address there.
- No more than 250 people could be employed by the business.
- The fixed costs had to amount to at least EUR 4,000 in a period of three months.
How to apply.
From the middle of June 2020 onwards, applications for this scheme could be submitted via de RVO website. Applications had to be submitted via E-Recognition or DigiD.
Second round of TVL
The TVL has been extended by three periods of three months each. This means that the TVL has been extended until 30 June 2021. This scheme was introduced for small and medium-sized businesses hit the hardest by the effects of coronavirus.
- First period (1 October 2020 to 31 December 2020): the conditions of the first round of the TVL applied to this period. The minimum loss of revenue had to be 30% in order to be eligible for this compensation. The maximum subsidy amount for this period amounted to EUR 90,000 per three months.
- Second period 2 (1 January 2021 to 31 March 2021): the loss of revenue in order to be eligible for the compensation in this period must be at least 30%. The maximum subsidy amount has been increased to EUR 330,000 (and EUR 400,000 if there are more than 25 employees) per three months. The minimum amount for fixed expenses of EUR 3,000 per three months will also be lowered in this period.
- Third period (1 April 2021 to 30 June 2021): the loss of revenue in order to be eligible for this compensation must be at least 30%.
The other conditions for the TVL remain unchanged. In order to claim the extension of the TVL, an application must be submitted to RVO for every period individually.
Please note that for the award of the TVL for Q4 2020 and Q1 2021, the SBI codes will not be looked at. This means that all businesses that meet the above requirements are entitled to TVL. The maximum subsidy percentage is 85%.
How to apply.
Applications for the TVL for Q4 2020 are now closed. It is expected that applications for the TVL for Q1 2021 will be opened in the middle of February 2021 via the RVO website. Applications must be submitted via E-Herkenning (E-Recognition) or DigiD. In order to claim the TVL extension, an application must be submitted to the RVO for every period individually.
Hospitality industry: Hospitality Stocks and Adjustments (“HVA”)
As a result of the tightened corona measures, hospitality businesses have had to stay closed since 14 October 2020. This is why hospitality businesses that apply for TVL will receive a once-only addition, known as HVA (Horeca Voorraad & Aanpassingen). Entrepreneurs will receive a once-only addition in the amount of 5.6% of their loss of revenue in Q4 2020. The maximum subsidy amount for TVL continues to be EUR 90,000 per quarter. This compensation applies to the following SBI codes:
- 56.10.1 (restaurants)
- 56.10.2 (fast food restaurants, cafeterias/diners, ice-cream parlours, food stands)
- 56.29 (canteens and contract catering)
- 56.30 (cafés, discotheques, night clubs).
Event catering and hotel-restaurants are excluded from the HVA subsidy. The application period has now closed.
Events Module for the events industry (“VLE”)
Entrepreneurs in the events industry qualify for the Events Module in Q4 2020 and Q1 2021. It amounts to 33.3% of the TVL subsidy from June up to and including September 2020. The maximum subsidy amount is EUR 16,650. Please note that entrepreneurs in the events industry are only eligible for the VLE if they are not eligible for the TVL for Q4 2020. Moreover, a number of requirements are attached to the VLE, one of which is that the entrepreneur must have earned at least 50% of his turnover with public events in Q2 and Q3 2019. The entrepreneur must also have received the TVL in respect of the period Q3 2020.
How to apply
It will probably be possible to submit applications for both quarters separately in the 1st quarter of 2021. More information about the application procedure will follow soon.
Retail trade: Stocks of Closed Retailers (“VGD”)
Due to the tightened corona measures, retailers have had to stay closed since 15 December 2020 when the Netherlands went into lockdown. Non-food retailers who apply for the TVL will therefore receive an extra compensation: the VGD (Voorraad Gesloten Detailhandel; Stocks of Closed Retailers). If the loss of revenue is at least 30%, a once-only extra compensation of 5.6% of the loss of revenue in Q4 2020 and 21% of the loss of revenue in Q1 2021 can be received. The maximum amount is EUR 20,160. This compensation comes on top of the TVL. If the TVL for Q4 2020 has already been applied for, the extra compensation will be paid automatically. This compensation applies for businesses who are registered with their main activity under SBI code 47 and who were subject to mandatory closure. A list of the SBI codes granting access to the scheme can be found here.
This compensation is exempt from taxation, as opposed to the TVL. However, this compensation can be considered as revenue for NOW purposes. Just as in the case of the TVL, the main activity registered with the Chamber of Commerce on 15 March 2020 will determine eligibility.
24. Housing costs allowance
In cases where it is difficult to pay the rent or the mortgage due to a sudden decrease in income, it is possible to submit an application for a housing costs allowance to the municipality.
The conditions for the housing costs allowance are the following:
- There has been a sudden, strong decrease in income;
- There are not many savings or valuable assets;
- The applicant must start to look for a cheaper rental or owner-occupied property;
- In the case of an owner-occupied property: the costs of the owner-occupied property are too high for the income from a relative perspective (mortgage interest, insurance, maintenance and real estate tax);
- In the case of a rental property; the application for the rent allowance (‘huurtoeslag’) has been denied by the tax authorities.
The application must be submitted in the municipality in which you are living. Individual municipalities may have attached specific requirements that must be satisfied before the housing costs allowance is granted.
25. Deduction of cost of travel by public transport for tax purposes
Any ongoing, non-reimbursed costs of commuter travel incurred prior to March 13, 2020 are deductible for Personal Income Tax purposes, even if the work is being performed at home. This, for instance, concerns a one-year public transport subscription purchased previously, while most of the work is being done at home. In that case these costs can be deducted in the 2020 Personal Income Tax return, if they are not reimbursed by the employer.
26. Increase in gift tax exemptions for 2021
A person who receives a gift from someone who is living in the Netherlands at the time of the gift is required to pay Dutch gift tax. A number of exemptions apply, which means that if the amount gifted exceeds the exemption, gift tax only has to be paid on the amount that exceeds the exemption.
Two exemptions have been temporarily increased by EUR 1,000 due to corona. The reason for this increase is that the government wanted to be able to offer additional financial support to entrepreneurs who are less well off financially due to corona.
The exemptions concerned are:
- the gift tax exemption for children: in 2020, this exemption amounted to EUR 5,515; as a result of the extra increase and the adjustment for inflation, this exemption will be EUR 6,604 in 2021;
- the gift tax exemption for third parties (e.g. grandchildren, friends or gifts from children to their parents): this general exemption amounted to EUR 2,208 in 2020 and will be increased to EUR 3,244 in 2021.
Please bear in mind that these increases will apply in 2021 only.
27. Compensation for costs of child care during closure
Child care centres are closed to children of parents working in “non-essential professions”. Parents working in essential professions can continue to make use of child care.
All parents who would normally use childcare have been asked to continue to pay the costs of the child care. In that case they will receive an allowance that approximates their own contribution. Parents working in essential professions who make use of child care can also receive an allowance.
The allowance applies to all types of formal care (day care, pre-/after-school care and guest parenting) and it is important that the tax authorities have the right data for the child care allowance, such as contract hours or income.
Parents who receive the childcare allowance and parents who do not receive it are eligible for a compensation:
- Parents who receive the childcare allowance
Parents who receive the childcare allowance will additionally receive a compensation for their own contribution. This compensation does not have to be applied for: the Dutch Social Insurance Bank (Sociale Verzekeringsbank) will automatically pay it to the parents. The date of payment is still unknown.
- Parents who use child care without receiving the childcare allowance
Even parents who do not receive the childcare allowance can receive a compensation for the costs of child care. This scheme still needs to be fleshed out and for this scheme the date of payment is also still unknown.
28. Kick-Start Vouchers
Companies that operate internationally and have been hit by corona may be eligible for a discount so that they can hire an external advisor of their choice. With this “Kick-Start Voucher”, they are entitled to an 80% discount, with a maximum of EUR 2,500 exclusive of VAT.
This measure aims to enable entrepreneurs to limit the consequences of coronavirus for their small and medium-sized businesses abroad. For instance, an investigation of new (digital) earning models could be performed, a new international marketing plan could be prepared and the logistic process could be set up differently.
29. Temporary Support with Necessary Costs (Tijdelijke Ondersteuning Noodzakelijke Kosten or “TONK”)
For families that face financial problems, the government has introduced the TONK scheme (temporary support with necessary costs). This is mainly intended for families that are facing a significant loss of income, families that have to fall back on state benefits or families that do not qualify for any state benefits or the presented support measures. One of the consequences this may have is that they cannot pay for the necessary costs any more.
Municipalities are now working on a special benefit scheme to provide for the above-mentioned situations. The TONK scheme is expected to take effect on 1 March 2021 and will be carried out by the municipalities. The TONK scheme will apply with retroactive effect, viz. from 1 January 2021 onwards, and will continue until 30 June 2021. The possibilities of TONK may differ from one municipality to the next. Combating poverty and debt problems as well as retraining and reintegrating possibilities will also be part of this special benefit scheme.
30. Employment-Related Investment Discount (“Baangerelateerde Investeringskorting” or “BIK”)
The Employment-Related Investment Discount (“BIK”) is a temporary measure intended to encourage businesses to continue their investments during this corona time. It will apply to investments made in 2021 or 2022. A number of criteria must be satisfied in order to be eligible for the BIK scheme:
- The investment decision must have been taken after 1 October 2020;
- The investment must be fully paid in 2021 or 2022;
- It must concern a new asset that the business starts to use within 6 months after its purchase.
The BIK subsidy can be applied for by businesses that are subject to corporate or personal income tax and that pay wage tax for their employees to the tax authorities. In order to be eligible for the BIK subsidy, a “BIK statement” issued by RVO is required. The BIK statement can be used four times a year. After the BIK statement has been issued, the investment discount stated therein can be deducted from the wage tax to be paid to the tax authorities via the entrepreneur’s wage tax return.
The BIK scheme can be combined with the Small-Scale Investment Deduction (kleinschaligheidsinvesteringsaftrek or “KIA”), the Environmental Investment Deduction (Milieu Investeringsaftrek or “MIA”) and the Energy Investment Deduction (Energie Investeringsaftrek or “EIA”).
Please note that this scheme is yet to be approved by the European Commission. We will of course let you know as soon as the approval has come through.
31. Guarantee fund for events
The Dutch government will present plans to set up a guarantee fund for events, so that organisers can start organising large-scale public events after 1 July 2021 and with a minimum of 3,000 visitors. If such an event cannot go ahead after all as a result of corona measures, the government will now act as guarantor. The government is still working on the exact details of the guarantee fund. A minimum of EUR 300 million has been reserved for it.
32. Subsidy scheme for new entrepreneurs
A separate subsidy scheme for new entrepreneurs will be introduced. For this purpose, new entrepreneurs are defined as entrepreneurs who registered their business with the Trade Register between 1 January 2020 and 30 June 2020 or who re-registered – as a result of a new start – with the Chamber of Commerce during this period. The government is still working on the details of the new scheme, but there is a possibility that it will be based on the TVL. The requirements for applications under this scheme must also still be determined.
33. Home working allowance
Provided certain requirements are satisfied, employers can already pay an untaxed home working allowance based on the “free space” of the employment cost scheme (point 15 of this newsletter), for instance in the area of ICT and ergonomically sound workplaces. The government is now looking at whether, and if so, how, employers can be enabled to also reimburse other costs of working from home untaxed.
We’ll keep a close eye on the above-mentioned measures and would like to inform you by email about the developments, so that entrepreneurs can benefit from the measures as much as possible. Please be aware that the support measures are constantly subject to change, so please contact us for your specific situation. If you wish, we can of course help you with the submission of applications for the various schemes and provide you with advice. Feel free to contact us if you have any questions and stay safe!