Tax and Legal
You can currently apply or calculate the support measures. Please keep the following deadlines in mind:
Please see our newsletter for an overview of all terms and conditions.
If you have any questions and/or comments, please let us know!
Would you like to apply for the TVL Q2 2021?
The Dutch government has decided to further expand the TVL (“Tegemoetkoming Vaste Lasten”, government contribution towards the fixed expenses for small and medium-sized businesses). The TVL helps entrepreneurs and self-employed persons with the payment of their fixed expenses. The TVL subsidy depends on the loss of revenue (which must be at least 30%), the fixed expenses percentage and a subsidy percentage.
Q2 now opened up
For many entrepreneurs, the reference period for the TVL Q1 2021, viz. the 1st quarter of 2019, was not representative. During this period, they realised little or no turnover due to the prevailing situation. As a result, they also received a lower TVL subsidy or no TVL at all. This is why then can choose between 2 different quarters (i.e. Q2 2019 or Q3 2020) as the reference period for the TVL Q2 2021.
In addition, the subsidy percentage will increase from 85% to 100%, while entrepreneurs who started their business between 15 March and 30 June 2020 can also apply for the TVL Q2 2021.
The requirements for the TVL Q2 2021 are set out below:
Eligibility requirements for the TVL Q2 2021
- The loss of revenue of your business must have been more than 30% in the 2nd quarter of 2021, compared to either the 2nd quarter of 2019 or the 3rd quarter of 2020.
- The fixed expenses must be at least €1,500 per quarter, based on the fixed expenses percentage established for your main activity.
- Your business must have been registered with a Dutch Chamber of Commerce on 30 June 2020 and must have an SBI code and at least one establishment in the Netherlands, with a front door that is separate from your home address. A number of exceptions apply to this establishment requirement, including for freight transport, the itinerant trade, fairground attractions, driving instructors and some types of cafes/restaurants.
Please note that if your calculated fixed expenses are less than €3,000 per quarter, you can now also apply for the TVL Q2 2021. You will receive the subsidy, if the fixed expenses are €1,500 or more. The calculated fixed expenses will be looked at, not the actual fixed expenses. For the calculation of the fixed expenses, RVO (the Netherlands Enterprise Agency) calculates the average share that the fixed expenses form of the revenue in your industry. This is referred to as “the fixed expenses percentage”. This means that you do not have to indicate what your actual fixed expenses were.
Would you like to apply for the TVL Q2 2021? You can submit your application up to and including 20 August 2021 at 05.00 p.m. via eHerkenning (eRecognition) (level 3) or DigiD. In order to be eligible for the extension of the TVL, an application must be submitted to the RVO for every period individually.
We would be glad to help you with your application for the TVL Q2 2021. Please let us know by 13 August at the latest whether we can assist you with this.
New VAT rules for Dutch entrepeneurs who deliver goods to consumers in other EU member states.
On 1 July 2021, the VAT rules for Dutch entrepreneurs who deliver goods and/or digital services to private individuals (without VAT numbers) in other member states will change. Are you delivering goods that are already in the EU and does the turnover that you realise with this in other member states exceed €10,000? In that case you need to charge the VAT of the member state where you have delivered the goods and/or digital services with effect from 1 July next. This foreign VAT must then be paid to the tax authorities in the country in which you realised the turnover.
In order to limit the administrative burden, use can be made of the One Stop Shop of the tax authorities. The foreign VAT can be declared and paid to other member states via this One Stop Shop on a quarterly basis. Your application for this One Stop Shop must be submitted before 1 July next.
If these new VAT rules apply to your business and the threshold of €10,000 is exceeded, it is important that your webshop, invoices and administration are adjusted. Are the new VAT rules applicable to your business or are you in doubt about this?
In that case please contact us as soon as possible!
TVL (contribution towards fixed expenses) for business start-ups - Q1 2021
In the 1st quarter of 2021, business start-ups are getting financial assistance via the TVL for Business Start-Ups (in Dutch: TVL Startende ondernemingen). This is a separate TVL subsidy scheme. The TVL for Business Start-Ups is meant for small and medium-sized businesses and also applies to self-employed persons who have a separate front door to their working area.
The level of the subsidy is based on the loss of revenue and on the fixed expenditure percentage that has been established for the SBI code of the main activity. As a starting entrepreneur in the Netherlands, you can apply for a subsidy for your fixed expenses if you fulfil the eligibility requirements for the subsidy.
Eligibility requirements for the subsidy
For the TVL for business start-ups, the following provisional requirements apply for Q1 2021:
- The business must have re-registered with the Trade Register of the Chamber of Commerce during the period from 1 October 2019 up to and including 30 June 2020.
- The business has an SBI code and is established in the Netherlands, but not at the home address. Exceptions apply to this establishment requirement, including for freight transport, itinerant trade, fairground attractions, driving instructors and some types of cafes/restaurants.
- The fixed expenditure of the business must be at least €1,500 per quarter. The RVO (Netherlands Enterprise Agency) calculates this with the fixed expenses percentage that has been established for the relevant SBI code.
- The business must have suffered a demonstrable loss of revenue in the 1st quarter of 2021 of 30% or more, compared to the revenue for the 3rd quarter of 2020.
- The minimum subsidy amount per quarter is €1,500.
- The maximum subsidy amount per quarter is €124,999.
- Is the business associated with or part of another business and thus part of an existing group? In that case you will not be eligible for the TVL for Business Start-Ups for the first quarter of 2021, if the registration date of any associated business within the group lies before 1 October 2019. Examples are:
- operating companies;
- new branches that are starting up in a separate Dutch limited liability company;
- franchisees who are not independent of the franchisor.
- The business may not be a financial institution or a government enterprise.
- The business may not be bankrupt and may not have filed a petition for a postponement of payment (moratorium) with a District Court.
Additional requirement in the case of an application of €25,000 or more and a business registered in the period from 16 March up to and including 30 June 2020
Were you registered with the Trade Register of the Chamber of Commerce in the period from 16 March 2020 up to and including 30 June 2020 and are you applying for a subsidy of €25,000 or more? In that case your application must be accompanied by a statement made by an independent expert: an accountant, tax advisor or bookkeeper. The statement of an expert third party serves as an extra check of:
- The indicated loss of revenue;
- The actual existence of the business (a business may not be part of a group for which the registration date of any associated business in the group lies before 1 October 2019).
Would you like to apply for the TVL for Business Start-ups in Q1 2021? You can apply for the TVL for Business Start-Ups for Q1 2021 with effect from 31 May at 09:00 a.m. until 12 July at 05.00 p.m. Your application must be submitted via eHerkenning (eRecognition) (level 3) or DigiD.
We would be glad to help you with your application for the TVL for Business Start-ups for Q1 2021. Please let us know by 5 July at the latest whether we can assist you with this.
Deadlines Corona support measures March 2021
You can currently apply or calculate the support measures. Please keep the following deadlines in mind:
NOW 3.2: February 15, 2021 till March 15, 2021
NOW 3.3: May 17, 2021 till June 14, 2021
TVL Q1: February 15, 2021 till May 1, 2021
TVL Q2: To be expected as from the end of May till August 1, 2021
TOZO 3: October 1, 2020 till April 1, 2021
TOZO 4: April 1, 2021 till July 1, 2021
Definitive calculation NOW 1.0: October 7, 2020 till November 1, 2021
Definitive calculation NOW 2.0: March 15, 2021 till November 1, 2021
Definitive calculation TVL 1: End of February 2021 till April 1, 2021
Please see our newsletter for an overview of all terms and conditions.
If you have any questions and/or comments, please let us know!
Update most important Corona support measures december 2020
You can currently apply for the support measures. Please keep in mind the following deadlines:
- NOW 3.1: deadline à December 13, 2020
- TVL 2.1: deadline à January 29, 2021
- Tozo 3: deadline à March 31, 2021
The main terms of the named compensations are discussed below as there is an approaching deadline.
As with the first and second round of the NOW, a number of conditions remain the same. The most important conditions for applying for this compensation for the first period are listed below for you.
- There must be a decrease in turnover of at least 20%.
- The prohibition on making profit distributions to shareholders, bonuses to the board and the purchase of own shares will remain in place.
- The exemption percentage for the wage bill is 10% in the first period (1 Oct. to 31 Dec. 2020).
- The best efforts obligation aimed at training and the prohibition on the payment of dividends and bonus payments will remain for NOW 3.0.
- The fixed (fixed) surcharge for employer's contributions, such as holiday allowance, pension premiums and employer's premiums, remains 40%.
The most important conditions
for applying for the TVL 2.0 for the first period are listed below for you.
- The company must have more than 30% loss of turnover in the 4th quarter of 2020 compared to the 4th quarter of 2019.
- The fixed costs are at least € 3,000 in the 4th quarter of 2020, based on the percentage of fixed costs associated with the main activity of the company.
- In addition, the company must have at least one location other than the private address of the entrepreneur. With the exception of catering establishments and street trading.
- The company may have a maximum of 250 employees.
- The company must have been registered in the Trade Register of the Chamber of Commerce by March 15, 2020.
Please note! The TVL 2.0 is no longer dependent on the SBI-code of the company in the first period.
The Tozo provides an additional benefit up to a maximum of EUR 1,512 net. You are may be eligible for the Tozo if:
- you have a household income below the social minimum as a result of the corona crisis and / or a liquidity problem for which you need a business credit;
- you worked at least 1,225 hours in your own company in 2019. If you started in your company after 1 January 2019, you must have worked on / in your company at for least 23.5 hours per week on average in the period between registration with the Chamber of Commerce and submitting the application 2020 (hours spend on administration and acquisition also count).
- If you want to apply for assistance to meet the need for working capital, no request has been submitted for a suspension of payments or for a declaration of bankruptcy for you, your household, your company or self-employed profession.
Consult our newsletter for an overview of all conditions!
We would like to know whether your company(-ies) meet the conditions set for one or more of the support measures and whether we can get started with the application for you. We again ask for a fixed fee of EUR 250 ex VAT for the application of the NOW 3.1 and Tozo 3 and EUR 275 ex VAT for the for the application of the TVL 2.1.
If you have any questions and/or comments, please let us know!
Most important Corona Support measures
Please find below an abridged version of our information email regarding the economic support measures and other relevant matters. The schemes to be discussed are:
- NOW (can be applied for with effect from 16 November 2020)
- Tozo (deadline: 30 November 2020)
- TVL (can be applied for with effect from 16 November 2020)
- Postponement of payment (deadline: 31 December 2020)
The most important measures are discussed below, because a deadline is nearing or because it is possible to submit applications for the scheme concerned.
Extension of NOW (Temporary Emergency Bridging Measure for Sustained Employment)
At the end of August, the Dutch government announced that the NOW scheme would be extended with three periods of three months each. This means that the NOW scheme has been extended until 30 June 2021. During these three periods, the compensation will be gradually reduced. For the determination of the total salary costs, the month of June 2020 will be used as the reference.
- Period 1 (1 October 2020 up to and including 31 December 2020): during this period the compensation will amount to a maximum of 80% of the total salary costs. Any salaries in excess of EUR 9,538 gross per month are not eligible for compensation during this period. The NOW compensation can be applied for in this period if the loss of revenue is at least 20%.
- Period 2 (1 January 2021 up to and including 31 March 2021): during this period the compensation will amount to a maximum of 70% of the total salary costs. Any salaries in excess of EUR 9,538 gross per month are not eligible for compensation during this period. The NOW compensation can be applied for during this period if the loss of revenue is at least 30%.
- Period 3 (1 April 2021 up to and including 30 June 2021): during this period the compensation will amount to a maximum of 60% of the total salary costs. Any salaries in excess of EUR 4,769 gross per month are not eligible for compensation during this period. The NOW compensation can be applied for during this period if the loss of revenue is at least 30%.
In the third round of NOW, employers may reduce their salary costs by a certain percentage without a resulting decrease in the NOW compensation.
- During the first period, the salary costs may be reduced by a maximum of 10%.
- During the second period, the salary costs may be reduced by a maximum of 15%.
- During the third period, the salary costs may be reduced by a maximum of 20%.
If the salary costs are decreased by larger percentages, there will be no NOW entitlement in respect of that part. The salary costs can be reduced in several ways: by not renewing fixed-term contracts, by laying off staff or through a voluntary salary reduction (“salary sacrifice”); such a salary sacrifice does require the employee’s consent and in this case it is wise to record the agreements made in writing.
If an application is made, 80% of the requested compensation is paid as an advance. In addition to the compensation for their salary costs, employers also receive a compensation for the monthly accrual of the holiday pay, pension contributions and employer’s contributions. This upcount is 40%. Profit distributions to shareholders, bonusses to directors and the redemption by companies of shares in their own capital are prohibited. Employers also have a duty to try and (re-)train their employees.
Would you like to apply for NOW? The application for the first period of NOW 3.0 can be made with effect from 16 November 2020 until 13 December 2020. The final determination of NOW 3.0 will take place in the summer of 2021.
Final determination of NOW
If you only applied for the NOW compensation for March, April and May (first NOW round) and you have received an advance, the final determination of the NOW compensation can be requested with effect from 7 October 2020. The date for the final determination of the second NOW round is yet to be announced. This means that if you applied for compensation in both the first and the second NOW rounds, you can only request the final determination later.
When the NOW is determined in retrospect, an auditor’s report or statement issued by a third-party expert may need to be submitted for the final determination of the compensation.
- If you received an advance in excess of EUR 100,000 or a fixed compensation in excess of EUR 125,000, an auditor’s report must be submitted.
- If you received an advance in excess of EUR 20,000 or a fixed compensation in excess of EUR 25,000, a statement issued by a third-party expert must be submitted. A third-party expert can, for instance, be an external consultant, external financier, industry organisation or auditor/tax advisor. As a registered tax advisor, Holthaus Advies can of course also prepare this statement.
- If no auditor’s report is required, the check will be made on the basis of the books and records.
Extension of the Tozo scheme (Temporary Benefit for Self-Employed Professionals)
Self-employed professionals can receive income support via Tozo in two ways.
- Income support up to the social minimum. This top-up does not have to be repaid. Self-employed professionals can top up their income up to a level of EUR 1,050 net per month. If both partners are self-employed, a maximum amount of EUR 1,500 net per month applies.
- In addition, a maximum loan of EUR 10,157 for business capital can be applied for at a reduced interest rate. The maximum term of this loan is 3 years, at an interest rate of 2%.
The government has extended the Tozo scheme by nine months, viz. up to and including 30 June 2021. In addition to the already existing “partner test”, a wealth test will be introduced starting with Tozo applications as per 1 April 2021. The wealth test will look at the immediately available resources. If a self-employed professional has more than EUR 46,520 in immediately available resources, there is no entitlement to Tozo 3. Immediately available resources include cash, bank and savings balances, shares, bonds and options. Other assets, such as an owner-occupied property, business equipment and stocks, are not included in the wealth test, as they are not immediately available resources. The wealth test will not apply in the period from 1 October 2020 up to and including 31 March 2021.
Would you like to apply for Tozo? Applications for Tozo can now be submitted to the municipalities. Please note: Tozo can still be applied for with retroactive effect to 1 October 2020 until 30 November 2020. If Tozo is applied for in December (or later), Tozo will apply with effect from the month in which the application was submitted.
Final determination of Tozo 1
If you have applied for Tozo 1, the municipality will ask you to submit a profit statement. The profit statement must specify the profit in respect of the period of Tozo 1. It is possible to change the period of the compensation when the profit statement is completed. Please note: the profit statement is mandatory. If it is not submitted, the Tozo benefit received may have to be repaid.
Extension of TVL (Contribution towards Fixed Expenses for Small and Medium-Sized Businesses)
Depending on the size of the business and the level of the fixed expenses and loss of turnover, businesses can receive a contribution towards their fixed expenses. The scheme has applied since 1 October 2020 and has been divided into three periods of three months each. This means that the TVL scheme will apply up to and including 30 June 2021. The maximum of this contribution is EUR 90,000 per period.
- Period 1 (1 October 2020 up to and including 31 December 2020): the loss of turnover must be at least 30% in order to be eligible for this contribution.
- Period 2 (1 January 2021 up to and including 31 March 2021): the loss of turnover must be at least 40% in order to be eligible for the contribution in this period.
- Period 3 (1 April 2021 up to and including 30 June 2021): the loss of turnover must be at least 45% in order to be eligible for this contribution.
The other conditions to be satisfied in order to be eligible for TVL are:
- The company must have been established and registered with the Chamber of Commerce prior to 16 March 2020.
- The business must have a Dutch branch.
- The business must have a physical establishment outside the entrepreneur’s home. For hospitality businesses and itinerant trade (such as driving schools, taxi transport and market traders) an exception applies: the business address may be the same as the home address there.
- No more than 250 people may be employed.
- The fixed expenses during a period of three months must be at least EUR 3,000.
- The business must have one of the required SBI codes eligible for TVL support. You can find these SBI codes here. Please note: for the first period (1 October 2020 up to and including 31 December 2020), the SBI codes will not be considered, which means that all businesses that satisfy the above requirements are entitled to TVL.
Would you like to apply for TVL?The application for this support can be submitted with effect from 16 November 2020 via the RvO website. The deadline is 21 January 2021. The application must be made through E-Herkenning or DigiD. In order to be eligible for the TVL extension, an application must be submitted to RvO for every period individually.
Hospitality business? In addition to the TVL, a once-only compensation of approx. EUR 2,500 applies to hospitality businesses. The subsidy amounts to 2.75% of the loss of turnover. This compensation must be applied for simultaneously with TVL, meaning that no additional request has to be made.
Event business? Because the summer months are the most important period for the events industry, the calculation of the TVL could be lower. This is why the government has introduced a top-up of the TVL for entrepreneurs in the events industry. More information about this scheme will follow soon.
Extension of postponement of tax payment and decrease in penalties and interest
Entrepreneurs who are facing financial difficulties due to the coronavirus can request a special postponement of tax payment until 31 December 2020. The postponement will end on 31 December 2020 at the latest. Please note that this is a postponement, not a waiver of the tax payment. The postponement applies to the following taxes:
- Personal Income Tax
- Corporate Income Tax
- Wage Tax
- Turnover Tax (VAT)
The collection and tax interest had been reduced to 0.01% until 1 October 2020. From 1 October 2020 up to and including 31 December 2020, the rate of the collection interest will continue to be 0.01%. The tax interest, however, was increased to 4% with effect from 1 October 2020. This applies to all types of tax, so also to Corporate Income Tax (normal rate: 8%). The remission of fines will apply only if a request for a postponement of payment has also been made. Old default fines will not be remitted and new default fines will be remitted only if they are caused by financial difficulties due to coronavirus.
Please note: with effect from 1 January 2021, new tax assessments must be paid within the normal payment periods.
Would you like to request a postponement?
For the Personal and Corporate Income Taxes, you will receive the assessment concerned after you have filed the tax return. For the Wage Tax and Turnover Tax (VAT), you will receive an additional assessment if you have not paid the tax within the normal period. Unfortunately, it is not possible to submit a request for a postponement in advance; you can only submit a written request for a postponement to the tax authorities after you have received an (additional) assessment. The deadline for requests for a postponement of payment is 31 December 2020.
A repayment period of three years will be introduced: from 1 July 2021 to 1 July 2024. Faster repayment is allowed of course. In the spring of 2021, the tax authorities will send letters in which a payment arrangement is proposed. Faster repayment is always possible of course.
Our services for you
We’ll keep a close eye on the above-mentioned measures and would like to inform you by email about the developments. If you wish, we can of course help you with the submission of applications for the various schemes. Feel to contact us if you have any questions and stay safe!
Please note! This information doesn’t apply to the one man business (“eenmanszaak”), but is applicable to the Dutch limited liability company (“BV”) and the general partnership (“VOF”).
With effect from 27 September 2020, many organisations are required to register their UBOs in the new UBO Register held by the Dutch Chambers of Commerce.
What is a UBO?
The UBO (Ultimate Beneficial Owner) is the person who ultimately owns or controls a business, foundation or association (a “legal entity”).
In the case of a Dutch limited liability company (in Dutch: “BV”), UBOs are:
- persons owning more than 25% of the shares;
- persons holding more than 25% of the voting rights;
- persons who de facto control the business.
Why is a UBO Register being set up?
The UBO Register is an initiative of the European Union which is aimed at including the UBOs of companies incorporated in the Netherlands and other legal entities (see the enumeration below) in a central register and to make this register publicly accessible. With this European transparency measure, the EU seeks to combat money laundering and financing of terrorism.
After 27 September 2020, existing companies will have 18 months to register the information about their UBO/UBOs. Newly incorporated companies must immediately register their UBO/UBOs.
Which organisations have a registration obligation?
The registration obligation applies to the following entities:
- private limited liability companies (in Dutch: “BV’s”);
- public limited companies (in Dutch: “NV’s”);
- associations (in Dutch: “verenigingen”);
- mutual guarantee societies (in Dutch: “onderlinge waarborgmaatschappijen”);
- cooperative associations (in Dutch: “coöperaties”);
- professional partnerships (in Dutch: “maatschappen”);
- general partnerships (in Dutch: “VOF’s”);
- limited partnerships;
- shipping companies;
- SEs (European companies);
- SCEs (European Cooperative Societies);
- EEIGs (European Economic Interest Groupings);
Which organisations do not have a registration obligation?
No registration obligation applies to:
- one man businesses (in Dutch: “eenmanszaken”);
- listed companies and their 100% (direct or indirect) subsidiaries;
- Homeowners Associations (in Dutch: “VVE’s”); and
- associations with limited legal personality that do not run a business and legal persons created under public law.
In some cases, an exception can be granted for the registration obligation, viz. if registration would subject the UBO to the risk of fraud, kidnapping, blackmailing, violence or intimidation or if the UBO is a minor or is legally incapacitated otherwise.
Which information is registered and made publicly accessible?
The following UBO information will be made publicly accessible:
- month of birth;
- year of birth;
- state of residence;
- nationality; and
- nature and size of the interest held.
The documents submitted to the Chamber of Commerce, such as passports and partnership agreements, will not become publicly accessible.
For every UBO the following data can only be accessed by the Netherlands Financial Intelligence Unit (FIU-Nederland) and competent authorities, such as the tax authorities, FIOD (Netherlands Fiscal and Investigation Service) and AFM (Netherlands Authority for Financial Markets):
- BSN number;
- date of birth, place of birth, country of birth and home address.
These authorities can also access the documents submitted to the Chamber of Commerce.
What will happen if a business fails to (timely) register its UBO/UBOs?
The maximum penalty or fine to be forfeited by a business in the case of failure to (timely) register a UBO is EUR 21,750. It is also possible (in exceptional situations) that a prison sentence not exceeding two years is handed or that community service is ordered.
Do you need help?
If necessary, we can of course help you to register the UBO/UBOs. If you have any questions, you know where to find us!
Budget Day 2021: What are the consequences?
On Prinsjesdag (Prince’s Day, also known as Budget Day), the Dutch government announced its tax plans for 2021 and the consequences of the corona support measures. With this email we would like to inform you about the most important matters.
Measure to accommodate first-time property buyers
When a property is purchased, transfer tax is payable at a rate of 2%. That was and continues to be the main rule, but with effect from 1 January 2021, two exceptions apply.
The first exception concerns property buyers between the ages of 18 and 35: they are entitled to a once-only transfer tax exemption. The age limit is determined per buyer: if several persons buy a property jointly, the applicability of the exemption is determined for every buyer individually. For that matter, it does not have to be the buyer’s first owner-occupied property; the requirement is that the exemption has not been applied before.
The second exception is for buyers who are not going to live in the property they bought themselves. In that case, transfer tax must be paid at a rate of 8%. This, for instance, applies to a second home to be rented out to third parties, but also to a holiday home or a property parents buy for their children.
The criteria for the two exceptions are assessed at the time the notarial deed is executed. This means that the date on which the sale and purchase agreement is signed is not relevant for the amount of the transfer tax to be paid.
Income Tax rates
The rates of the Personal Income Tax in box 1 (earnt income and income from an owner-occupied residence) will be reduced stepwise. For the year 2021, a tax rate of 37.10% (2020: 37.35%) applies to incomes up to €68,507 and any income in excess of this amount is taxed at a rate of 49.50%, just as in 2020.
The effect of the general tax credit is that the income tax to be paid is lowered. In 2021, the general tax credit will be increased compared to 2020. In addition, the employed person’s tax credit (“arbeidskorting”) will also be increased. As a result of this increase, people who work (both employees and self-employed persons) will pay less income tax.
The tax credit for self-employed persons will be phased out in small steps in the years to come. This is aimed at reducing the tax differences between employees and self-employed persons. For 2020, the tax credit voor self-employed persons is €7,030 on an annual basis and with effect from 1 January 2021, this will be reduced to €6,670.
Certain deductions (including the mortgage interest reduction, tax credit for self-employed persons and the profit exemption for small and medium-sized businesses) can be deducted at a maximum rate of 43% in 2021 (in 2020: 46%).
Taxpayers must pay Personal Income Tax every year on their capital. In 2021, the rate will increase compared to 2020, but the capital that is exempted from tax will be increased. In 2020, capital is exempted from tax up to an amount of € 30,846 (this exemption applies per person); this amount will be increased to €50,000 in 2021.
Entrepreneurs or employees who also use the company car for private purposes pay tax (indirectly, via an addition to their income/salary that is subject to Wage Tax or Personal Income Tax), based on the list price of their car. The normal percentage of the addition is 22%, but for all cars with zero CO2 emissions a lowered percentage of 12% applies (in 2020: 8%). This lower rate applies up to a list value of €40,000, for the excess the general percentage of 22% applies. This maximum list value does not apply to hydrogen cars or solar cell cars.
With effect from 1 January 2020, a fiscal partner is no longer ‘allocated’ for the whole allowance year, but only with effect from the first day of the month after the tax partnership arose. A tax partnership may, for instance, arise if partners purchased a house together, had a child or got married. This measure means, in concrete terms, that a tax partnership arising later in the year does not necessarily mean that allowances received earlier in the year (for instance the housing allowance, care allowance and childcare allowance) have to be repaid.
Corporate Income Tax
In 2021 the rates for the Corporate Income tax for profits up to €245,000 (in 2020: up to € 200,000) will be reduced to 15%. Just as in 2020, the excess will be taxed at a rate of 25%.
If companies realise profits with certain innovating activities, a reduced rate may apply based on the “innovation box”. More specifically, this means that less Corporate Income Tax will be payable. The rate for the innovation box has been fixed at 9% with effect from 1 January 2021 (in 2020: 7%).
In 2020, dividends distributed to a shareholder (which is not a private limited liability company, a “BV”) are subject to dividend tax at a rate of 26.25%. This will be increased to 26.9% in 2021. On the other hand, the Corporate Income Tax rate will be reduced (see above).
Employment costs scheme
The “free space” of the employment costs scheme (“werkkostenregeling” or WKR) is normally 1.7% of the fiscal salary sum for the first €400,000 of the fiscal salary sum. As an exception due to the corona crisis, the free space is, only in 2020, 3% of the total fiscal salary sum for the first € 400.000 of the fiscal salary sum.
Tax consequences of corona subsidies
The Emergency Counter scheme (“TOGS”) enabled businesses to claim a compensation for the damage suffered as a result of the measures to combat coronavirus, provided certain requirements were satisfied. This scheme was followed by the TVL, a scheme enabling small and medium-sized businesses to receive a compensation for their fixed costs. Both forms of compensation are not part of the business profits, so no tax has to be paid on the amounts received under TOGS or TVL.
The TOFA scheme (Temporary Bridging Scheme for Flexible Employees) provided for a compensation as a contribution towards the cost of living. UWV (Employee Insurance Agency) will already have withheld tax from the compensation, but the general tax credit (“heffingskorting”) will also have been routinely applied. If several payments were received under TOFA or wages were received from more than one employer in 2020, additional tax may have to be paid via the Personal Income Tax return. The reason for this is that the general tax credit that has been applied was too high on balance. In addition, TOFA may effect people’s personal allowances (for instance, the care allowance, childcare allowance and housing allowance).
Under NOW (Temporary Emergency Bridging Measure for Sustained Employment), entrepreneurs could claim compensation for their wage costs. NOW is part of the business revenues and is therefore subject to Personal Income Tax (if the business is run in the form of a one-man business or partnership) or Corporate Income Tax (if the business is run in the form of a private limited liability company (BV)).