An independent member of

logoFull Created with Sketch.

Zoeken op

Zoeken op

Alles

International

Outline of the Dutch support measures available to entrepreneurs

For our international clients, we have updated our English news about the Dutch support measures below.

Grote bedrijven in Rotterdam

The third support package for entrepreneurs

— Monday, september 7, 14.00 CET —

What is included in the third support package?

Support for businesses that have been affected by the consequences of coronavirus is being extended until 1 July 2021. This was announced by the government on Friday, 28 August. What is changing?

Please note:

We are keen to ensure we provide up-to-date information. As we are writing, however, new additions or improvements to the support package may be announced by the government. The overview in this Coronavirus Newsletter is based on the information available as at 8 p.m. on Sunday.

  1. NOW scheme extended, but with stricter conditions
  2. Tozo 3.0: introduction of means test
  3. TVL: higher amount, but more stringent requirements
  4. Fiscal measures scaled back
  5. Credit facilities extended and new facilities may be introduced
  6. Possible insurance for events sector
  7. Supplementary social package

 

1. NOW scheme extended, but with stricter conditions

The contribution towards payroll costs for companies that have suffered a substantial drop in turnover is being maintained for three three-month periods. This means the Temporary Emergency Bridging Fund for Employment (NOW) will continue until the end of June 2021. However, under NOW 3.0 the conditions will gradually become stricter. Every quarter the requirements that have to be met relating to the drop in turnover will be tightened up incrementally, while the level of the contribution will also be reduced further. For employers applying under the NOW, the obligation to encourage employees to participate in training will remain in place, as will the ban on distributing dividends and bonus payments.

Fixed mark-up of 40%

A mark-up of 40% of payroll costs will continue to be added to the wage bill to compensate for charges paid by the employer, such as holiday allowance and pension contributions.

NOW 3.0: October to the end of December 2020

Over the first period, from October to the end of December 2020, a drop in turnover of at least 20% will still be required. The maximum compensation available under NOW 3.0, in the event of a drop in turnover of 100%, will be 80% of the company’s payroll costs, instead of 90% under NOW 1.0 and 2.0.

NOW 3.0: January to the end of March 2021

Over the second period, from January to the end of March 2021, the drop in turnover suffered must amount to at least 30%. The contribution paid over this period will be capped at 70% if a company has lost 100% of its turnover.

NOW 3.0: April to the end of June 2021

Over the third period, from April to the end of June 2021, the drop in turnover suffered must be at least 30% and the contribution paid in the event of a 100% drop in turnover will be just 60%.

In summary:

NOW 3.0 Minimum drop in turnover Maximum compensation
October to end of December 2020 20% 80%
January to end of March 2021 30% 70%
April to end of June 2021 30% 60%

No consequences for limited decrease in wage bill

The government has announced that employers can partially reduce their wage bill without this affecting the contribution they receive under NOW 3.0. Over the first three-month period (October to the end of December 2020) the wage bill may fall by 10%, over the second period (January to the end of March 2021) by 15% and over the third period (April to the end of June) by 20%. The reason for the decrease in the wage bill is irrelevant for the purposes of NOW 3.0. It may be a consequence of redundancies or agreements to voluntarily forgo salary, for example. It is not yet clear by how much the contribution will be reduced if the above percentages are exceeded.

Redundancy penalty to be removed

Entrepreneurs will no longer have their NOW subsidy reduced if they make employees redundant for commercial reasons. Such a penalty is currently applied under NOW 2.0. An entrepreneur is subject to a penalty under NOW 2.0 if he or she makes twenty or more employees redundant for commercial reasons without reaching an agreement with the trade union or another representation body.

Maximum salary under NOW 3.0

The maximum salary that qualifies for the contribution under NOW 1.0 and 2.0 is 2 x the maximum daily wage, i.e. € 9,538 (2020) per month. This maximum will also apply during the first two periods of NOW 3.0, i.e. for the period from October 2020 to the end of December 2020 and the period from January to the end of March 2021. Over the third period of NOW 3.0, from April to the end of June 2021, the maximum salary for the purposes of the contribution will amount to just 1 x the maximum daily wage (approximately € 4,769).

Applications for NOW 3.0 to open in November

The government is aiming to allow applications for NOW 3.0 to open on 16 November 2020. It will then be possible to submit an application for the first period, from October to the end of December 2020. Applications may be submitted irrespective of any previous applications under NOW 1.0 and/or NOW 2.0. It will again be possible to apply for NOW 3.0 via the Employee Insurance Agency (UWV).

Please note:

The precise conditions that will apply to NOW 3.0 are currently being worked out in detail and will be announced by 1 October 2020 at the latest.

2. Tozo 3.0: introduction of means test

The Temporary Bridging Scheme for Independent Entrepreneurs (Tozo) is also being extended until 1 July 2021. The main difference between Tozo 3.0 and the earlier versions of the scheme is the introduction of a means test.

Means test

Entrepreneurs with directly available funds of more than € 46,520 will no longer be eligible for the Tozo scheme. Directly available funds include cash, bank and savings account balances, shares, bonds and options. Other assets, such as commercial property and machinery, will not be considered. An entrepreneur’s own home and ring-fenced pension will also not count towards the € 46,520 limit.

Partner’s income test remains in place

The partner’s income test will be maintained. No consideration will be given to the viability of the business and the ‘kostendelersnorm’ (cost standard divisor) will still not be applied. The cost standard divisor means that if several adults are living together, the benefit payment is lower, as it is assumed that the costs will be shared.

Loan still possible

Under Tozo 3.0 it will still be possible to obtain a working capital loan. The total amount of the loan received under Tozo 1.0, 2.0 and 3.0 together may not exceed € 10,157. Entrepreneurs who have already received this amount in loans are therefore barred from applying again.

Bbz scheme after Tozo 3.0

The existing scheme in place under the Social Assistance (Self-Employed Persons) Decree (Bbz scheme) will continue to function as a safety net after Tozo 3.0 comes to an end on 1 July 2021. Support to help with living costs and working capital loans are also available under the Bbz.

Refocusing on the future

The government believes it is important that entrepreneurs who have experienced difficulties as a result of the coronavirus crisis refocus on their future. From 1 January 2021 local authorities will therefore be actively supporting such entrepreneurs with coaching, advice and further training or retraining.

Applications

Applications under the scheme can be submitted from 1 October 2020 to 30 June 2021. The opening date for applications may differ from one local authority to another. Keep an eye on your local authority’s website for more information.

3. TVL: higher amount, but more stringent requirements

The Reimbursement of Fixed Costs for SMEs scheme (TVL) is also being extended until 1 July 2021. Notable changes compared with the current scheme are that under the TVL from the third support package the maximum level of the compensation is increasing to € 90,000 for a three-month period and that from January next year the drop in turnover will need to be higher to qualify for the TVL.

Three three-month periods

The new TVL set out in the third support package has been divided into three three-month periods. As is the case for NOW 3.0, these periods will run from October to the end of December 2020, from January to the end of March 2021 and from April to the end of June 2021. In each of these three periods the contribution has been capped at € 90,000 per period. This is € 40,000 more than under the current TVL, which has a maximum of € 50,000.

Greater drop in turnover required

Under the TVL from the second support package the drop in turnover suffered must amount to at least 30%. This percentage will remain the same for the first period of the new TVL from October to the end of December 2020. For the following period, from January to the end of March 2021, a minimum drop in turnover of 40% will be required, with a figure of 45% applying in the period after that, from April to the end of June 2021.

Partial coverage

As is the case under the TVL from the second support package, the new scheme will only cover 50% of fixed costs. Industry averages, based on figures from the CBS (Statistics Netherlands), will continue to be taken as a basis for the calculation. A contribution of 50% will be paid on the basis of this average and the drop in turnover suffered.

Only for SMEs in specific sectors

The contribution is only available to SMEs in specific sectors and this will remain the case. This means that a company needs to have the correct SBI code. Amongst other conditions, it must also employ fewer than 250 staff.

More fixed costs required

In addition, a company must have fixed costs of at least € 4,000 per three-month period. Under the TVL from the second support package a four-month period currently applies. Consequently, a company needs to have more fixed costs to qualify for the contribution under the new TVL.

Applications

Applications relating to the first period of the TVL from the third support package, from October to the end of December 2020, can be submitted at RVO.nl from 1 October 2020 to 29 January 2021. Entrepreneurs must submit a separate application for each period.

4. Fiscal measures scaled back

The relaxation of tax rules as a result of the coronavirus crisis, such as the possibility of deferring payments and the reduction in the rate of tax interest, is being scaled back. It is currently possible to obtain a deferment of payments for taxes including income tax, corporation tax, VAT and payroll tax.

Deferment until 1 January 2021 at the latest

Until 1 October 2020 entrepreneurs can still apply to the Tax and Customs Administration for a deferment of tax payments or an extension of a deferment. Deferments will therefore end for all entrepreneurs on 1 January 2021 at the latest. In principle, it will no longer be possible to obtain a deferment from 1 January 2021 onwards.

Settlement of tax debts

Entrepreneurs who do not apply for a deferment or extended deferment from the Tax and Customs Administration will in principle have to settle their tax debts in 24 months. If you have obtained a deferment, you will need to start settling your debts by 1 January 2021 at the latest.

Custom solutions in the event of payment problems

If settlement is not possible, a custom solution, such as a longer deferment of payments, will be considered. In such cases a declaration from a third-party expert, such as an accountant, will be required. This declaration must demonstrate that you have liquidity problems, that these are temporary, that they will be resolved by an agreed date and that the business is viable. The Tax and Customs Administration is still considering the possibility of expanding the existing debt rescheduling options.

Late payment interest remains low

Late payment interest is payable if tax debts are not settled on time. As a result of the coronavirus crisis, the rate of late payment interest has been reduced to 0.01%. This means that entrepreneurs have to pay hardly any interest on their tax debts for the duration of a deferment of payments. The reduced rate of 0.01% for late payment interest will continue to apply until 31 December 2021.

Tax interest increasing from 1 October 2020

Entrepreneurs pay tax interest if a tax assessment is determined late due to the fault of the entrepreneur or if the Tax and Customs Administration has to deviate from the information provided on the tax return. The rate of tax interest is currently also 0.01%, but this rate will return to the original level of 4% from 1 October 2020. Tax interest in the area of corporation tax will also be set at 4% up to 31 December 2021 (instead of the original level of 8%).

Commuting allowance expanded

In the area of income tax a commuting allowance is available to employees for travel by public transport between home and work that is not refunded by the employer. Some people are now working from home and travelling to work much less often. As a result, they are entitled to a lower commuting allowance, although they are often still incurring the same costs. For 2020 the commuting allowance for income tax purposes will therefore be applied as if the employee has continued to follow the same commuting pattern as before the coronavirus crisis. However, this is subject to the condition that the employee’s travel costs are unchanged.

5. Credit facilities extended and new facilities may be introduced

Numerous credit facilities are being extended beyond 1 October 2020. It is not yet known whether the conditions will change. The extension will apply to schemes including the government-guaranteed scheme for loans to SMEs (BMKB) and the Small Loans Coronavirus Guarantee Scheme (KKC).

Together with the travel industry, the government is continuing to examine the feasibility and desirability of a credit facility linked to existing vouchers. If it becomes clear that government involvement would be demonstrably effective and desirable, this will be considered.

6. Possible insurance for events sector

In addition, the events sector is discussing new insurance instruments that would possibly allow activities to resume. If it becomes clear that government involvement would be demonstrably effective and desirable, this will also be considered.

7. Supplementary social package

In response to the job losses resulting from the coronavirus crisis, a sum of around € 1.4 billion is being earmarked for a range of social measures, including to help the UWV and local authorities support people in finding new work. These funds will also be available for retraining and further training, as well as to offer additional support for vulnerable individuals, such as young people and people with an occupational disability. In addition, support will be provided for people at high risk of poverty and problematic debts.

Disclaimer

We have endeavoured to compile these texts as reliably and as carefully as possible. Our organisation cannot be held liable for any inaccuracies they may contain or the consequences thereof.

Coronavirus: additional new measures for entrepreneurs

— Thursday, 21 May —

The second support package of € 13 billion: what is changing?

The first support package (previous text below), presented in mid-March, comes to an end on 31 May. On Wednesday, 20 May a second support package for entrepreneurs was announced. This largely extends the measures for a further three months (from June to August). What changes will the new package introduce? There will now be more compensation available for fixed costs, the redundancy penalty under the Temporary Emergency Bridging Fund for Employment (NOW scheme) will be removed and seasonal businesses will be offered a helping hand. In addition, a partner test will be introduced under the Temporary Bridging Scheme for Independent Entrepreneurs (Tozo).

Please note:

We are keen to ensure we provide up-to-date information. As we are writing, however, the government is constantly announcing new additions or improvements to (new) schemes. The overview in this Coronavirus Newsletter is based on the information available as at 8 p.m. on Wednesday, 20 May.

  1. Reimbursement of Fixed Costs for SMEs: more compensation for fixed costs in the event of a 30% drop in turnover
  2. NOW scheme 2.0: redundancy penalty withdrawn
  3. Tozo scheme 2.0: partner test now introduced
  4. Deferment of tax payments: extended until 1 September
  5. Coronavirus loans and guarantees for entrepreneurs (BMKB, GO, KKC, COL)

 

1. Reimbursement of Fixed Costs for SMEs: more compensation for fixed costs in the event of a 30% drop in turnover

Under the Reimbursement of Fixed Costs for SMEs scheme (in Dutch: Tegemoetkoming Vaste Lasten MKB (TVL)) companies can obtain compensation for their fixed costs. This will be capped at € 20,000 for the next three-month period. The level of the compensation received will depend on the size of the company, the level of its fixed costs and the drop in turnover suffered, which must amount to at least 30%. This requirement makes the scheme less accessible, as under the existing Contribution for Entrepreneurs in Sectors Affected by COVID-19 scheme (TOGS) it was necessary for a company’s turnover to have fallen by at least € 4.000 and the company must have at least € 4.000 fixed costs. The new scheme is also open to the same affected sectors that were eligible for the TOGS scheme. These include catering, recreation, gyms, events, fairs, gambling halls, venues and theatres. The compensation paid under the new scheme will also be free of tax.

2. NOW scheme 2.0: redundancy penalty withdrawn

Under the extended NOW scheme (NOW 2.0) a number of changes have been made. One example is the removal of the redundancy penalty. In addition, conditions apply to dividend payments and bonuses, and seasonal businesses are being offered a helping hand.

Companies that have suffered a drop in turnover can obtain a contribution towards their payroll costs. This NOW scheme reimburses up to 90% of the payroll costs of companies whose turnover drops by at least 20%. The maximum compensation of 90% applies if a company loses all of its turnover. If the drop in turnover is smaller, the compensation is reduced proportionately. This means that if a company sees its turnover fall by 50%, it can receive compensation for 45% of its payroll costs.

The drop in turnover is determined over a three-month period, for which the company can choose 1 June, 1 July or 1 August as the starting date. In the case of applicants who are taking advantage of the NOW scheme for a second time, the turnover period must fit in with the timeframe chosen for the first scheme period.

Under NOW 2.0 the level of the wage bill is derived from the wage bill for March. Any subsidies that entrepreneurs receive within the context of the coronavirus crisis are counted as turnover for the purposes of both NOW 1.0 and NOW 2.0. As a result, entrepreneurs who also receive a contribution on the basis of the TOGS scheme receive a lower contribution via the NOW scheme.

The government hopes that the extended contribution towards payroll costs for June, July and August will be open for applications from 6 July. It is now possible to apply for the payroll costs subsidy under NOW 1.0 until 5 June (previously 31 May).

Please note:

The fixed (flat-rate) mark-up is being increased from 30% to 40%. In this way the NOW scheme will also contribute towards costs other than payroll costs.

Seasonal businesses

An adjustment has been made to NOW 1.0 with a view to supporting seasonal businesses that increased their workforce between January and March. The wage bill for March will now be taken as the frame of reference instead of the unrepresentative wage bill for January.

If the wage bill from March to May is more than three times the wage bill for January, the wage bill from March to May is taken as the basis for calculating the final subsidy. The wage bills for April and May will then be capped at the level of the wage bill for March, with 15 May as the reference date. This new calculation method will automatically apply to all employers who have a higher average wage bill over the period from March to May compared with January (including capping).

Additional conditions for bonuses

A company that takes advantage of the NOW scheme this year may not distribute any dividends to shareholders, pay any bonuses to its board and/or management or buy back any of its own shares. The condition that no transactions of this nature may be effected in 2020 will apply up to the shareholders’ meeting in 2021 when the financial statements are adopted. Dividends, bonuses and shares for 2019 are not subject to this condition. ‘Bonuses’ is also understood to cover profit-sharing and other forms of bonus payment. This ban only applies to companies that are receiving a contribution for which a declaration from an accountant is required. The situations in which such a declaration is required will be announced later.

Redundancy penalty removed

Under NOW 2.0 the redundancy penalty imposed on an employer who makes employees redundant for commercial reasons while receiving the NOW subsidy is being removed. This applies to redundancy applications submitted to the Employee Insurance Agency (UWV) between 1 June and 31 August 2020.

If companies wish to apply to make more than 20 people redundant for commercial reasons, they must consult with trade unions on the proposed redundancy for a period of four weeks. This is required under the Collective Redundancy (Notification) Act. The statutory protection in the event of redundancy remains in force, which means the employer is still obliged to make a transition payment.

Further training and retraining mandatory

Employers who apply under NOW 2.0 will be subject to a best-efforts obligation to encourage their employees to participate in further training and retraining. The aim is to limit the number of compulsory redundancies as a result of the coronavirus crisis as much as possible. To this end, the government is making a € 50 million training package available under the name ‘NL leert door’ (‘The Netherlands keeps learning’). This package, the further details of which are yet to be worked out, will include development advice and online training specifically geared towards career steps that are relevant to the needs of the labour market.

3. Tozo scheme 2.0: partner test now introduced

Support under the Temporary Bridging Scheme for Independent Entrepreneurs (Tozo) for self-employed persons in financial need will also continue. The supplementary income support provided to help with living costs is being extended until the end of August 2020. Under the Tozo scheme a person’s income is supplemented up to the level of the minimum social income and this does not have to be paid back.

Conditions tightened to include partner test

Unlike Tozo 1.0, Tozo 2.0 will include a partner test. If the partner’s income results in the family income exceeding the minimum social income, under the new scheme a self-employed person will therefore no longer receive any income support. However, there will still be no means test: the viability of the business will not be considered and the so-called ‘kostendelersnorm’ (cost standard divisor) will still not be applied. The cost standard divisor means that if several adults are living together, the benefit payment is lower, as it is assumed that the costs will be shared. This will therefore not apply under the new Tozo scheme either.

Working capital loan

It will also still be possible to obtain support in the form of a working capital loan of up to € 10,157 at a reduced interest rate.

Please note:

Entrepreneurs can submit applications for Tozo 2.0 to the local authority in their municipality of residence from 1 June to 31 August.

 

4. Deferment of tax payments: extended until 1 September

The period during which affected entrepreneurs can apply for a deferment of tax payments has been extended until 1 September 2020. Any default penalties for late payment do not have to be paid. The rates of tax interest and late payment interest have been reduced to 0.01% until 1 October 2020 for all types of tax.

In addition, the other tax measures introduced, namely the relaxation of the hour criterion for self-employed persons, the mortgage payment holiday, the VAT exemption for medical aids and the VAT exemption for the loaning out of healthcare personnel, are being extended until 1 September 2020.

Entrepreneurs will be immediately granted a three-month deferment of payments on submission of their first application. An application only needs to be submitted once for this three-month period.

Please note:

Entrepreneurs who apply for a deferment of more than three months may not pay out any dividends or bonuses or buy back their own shares.

A deferment granted for more than three months will last until the deferment is withdrawn, which will not be before 1 September 2020. Upon expiry of the deferment entrepreneurs will be offered an appropriate payment arrangement. What this payment arrangement will involve is not yet clear.

5. Coronavirus loans and guarantees for entrepreneurs (BMKB, GO, KKC, COL)

The additional, expanded or more accessible loans and guarantees that were available to small and medium-sized enterprises, start-ups and scale-ups under the first emergency package will continue. This relates to the coronavirus modules of the government-guaranteed scheme for loans to SMEs (BMKB) and Corporate Finance Guarantee Scheme (GO), the new Small Loans Coronavirus Guarantee Scheme (KKC) and the increased budget for the SEED Capital scheme.

The Coronavirus Bridging Loan (COL), which helps to improve the liquidity position of innovative companies (start-ups and scale-ups), will be allocated an additional € 150 million over the next three months due to the large number of applications received.

 Disclaimer

We have endeavoured to compile these texts as reliably and as carefully as possible. Our organisation cannot be held liable for any inaccuracies they may contain or the consequences thereof.

— Tuesday, 28 April 2020 —

Important – check our more recent information above!

The government has taken additional measures to support entrepreneurs during the coronavirus crisis. For example, directors/major shareholders can reduce their customary salary further, the fixed budget under the work-related expenses scheme has been increased and the Contribution for Entrepreneurs in Sectors Affected by COVID-19 scheme (TOGS), which offers support of € 4,000, has been relaxed, as has the hour criterion for purposes of the self-employed person’s allowance. In addition, companies have been given the option of already forming a ‘coronavirus reserve’ and the introduction of the ‘DGA’ (director/major shareholder) tax has been postponed. In this newsletter we also cover a number of other points that may be of interest to you.

Please note:
We are keen to ensure we provide up-to-date information. As we are writing, however, the Dutch Government is constantly announcing new additions or improvements to (new) schemes. The articles below are based on the information available as at 4.30 p.m. on Tuesday, 28 April.

  1. Six additional coronavirus measures for entrepreneurs
  2. Further relaxation of TOGS € 4,000 support scheme and BMKB scheme
  3. NOW scheme expanded for groups
  4. Lower wage bill during NOW? Be aware of retrospective correction!
  5. In 2020 no adjustment of employer’s unemployment insurance contribution in the event of overtime
  6. Launch of bridging loan for start-ups and scale-ups
  7. Wage expenses subsidy (LKS) will not be deducted from contribution under NOW
  8. Tozo scheme also open to cross-border workers and persons of state-pension age

1. Six additional coronavirus measures for entrepreneurs

The government will once again be taking additional fiscal support measures to mitigate the negative impact of the coronavirus crisis for entrepreneurs in particular. The six measures in question were announced on Friday, 24 April.

Lower customary salary for directors/major shareholders
If you are a director/major shareholder, you are obliged to declare a ‘customary salary’ as the salary you receive from your company. In 2020 this customary salary would ordinarily have to be at least € 46,000. It can also be set at 75% of the salary for the most comparable position or at the level of the highest salary received by your company’s employees, if one of them earns more than € 46,000. It had previously been decided that the customary salary could be set at a lower level as a result of the coronavirus crisis. Now it has been announced that the customary salary may be reduced in proportion to the drop in your turnover. The measure will be structured in a similar way to a comparable measure used to determine customary salaries during the credit crisis around 2009. A condition at that time was that a dividend could not be paid out instead of a customary salary. According to calculations by the government, the measure should result in an average benefit of € 6,200 per director/major shareholder.

Relaxation of hour criterion
Entrepreneurs who are subject to income tax are entitled to take advantage of all kinds of facilities, such as the self-employed person’s allowance, to qualify for which you usually have to dedicate at least 1,225 hours a year to your business. To prevent entrepreneurs from losing access to these facilities if their business has come to a standstill or has very low activity as a result of the coronavirus crisis, for the period from 1 March to 31 May 2020 the tax authorities will assume that they have dedicated at least 24 hours a week to their business, even if these hours have not actually been worked. This relaxation of the facility will also apply to seasonal businesses, e.g. in the catering sector. On average, according to government estimates, this will result in a benefit of € 1,800.

Fixed budget under work-related expenses scheme increased
Under the work-related expenses scheme allowances and benefits in kind can be granted to employees free of tax. The work-related expenses scheme has a fixed budget of 1.7% of the wage bill up to € 400,000 and 1.2% on the excess amount. The employer only pays 80% tax via the final levy if the allowances and benefits in kind granted during a year exceed this fixed budget. For 2020 it has been decided that the fixed budget for the first € 400,000 of the wage bill will be increased to 3%. In these difficult times this will enable employers to offer their employees additional untaxed remuneration, such as a gift voucher or bonus, without the employer becoming liable for the 80% final levy. Thanks to this increase, an employer will be able to allocate up to an additional € 5,200 in allowances and benefits in kind to the fixed budget.

Offset losses via ‘coronavirus reserve’
Companies that pay corporation tax on their profits, such as private limited companies (BVs), are being allowed to include an expected loss in their 2019 tax return this year (and therefore earlier than would normally be the case) by forming a ‘coronavirus reserve’. This is subject to the condition that this coronavirus reserve does not exceed the profit for 2019. According to government estimates, this means that, on average, a company will receive € 25,000 in 2020 instead of in 2021 as a result of refunds on provisional tax returns for 2019.

Postponement of Act on taxation of excessive loans received by shareholders from their own company
The legislative proposal relating to the taxation of excessive loans received by shareholders from their own company, commonly known as the ‘DGA’ (director/major shareholder) tax, is being postponed by a year until 1 January 2023. Under this proposal a director/major shareholder will be required to pay tax on debts to his or her own company that exceed € 500,000, leaving debts used to finance his or her own home out of consideration. The postponement means that directors/major shareholders will have an extra year, until 31 December 2023, to pay off debts to their company of more than € 500,000 and in this way avoid paying tax on them.

Deduction of mortgage interest not at risk if repayments temporarily suspended
For mortgages taken out with effect from 2013 the deduction of mortgage interest is subject to a repayment obligation. As a result of the coronavirus crisis, banks are now offering their customers the option of suspending their interest payment obligation and repayment obligation for a maximum period of six months. To prevent the right to deduct mortgage interest being lost as a result, the repayment obligation is being relaxed. This means that the rules are being relaxed in relation to catch-up repayments. It will be possible to spread these over the remaining term of the mortgage or agree on a separate repayment schedule.

2. Further relaxation of TOGS € 4,000 support scheme and BMKB scheme

The conditions that apply to loans under the government-guaranteed scheme for loans to SMEs (BMKB) and the one-off grant of € 4,000 under the Contribution for Entrepreneurs in Sectors Affected by COVID-19 scheme (TOGS) are being relaxed further. This was decided by the government on Tuesday, 28 April. By relaxing the rules in this way, it will be possible to provide even better support to entrepreneurs who suffer losses as a result of the coronavirus crisis.

Expansion of BMKB scheme
Under the BMKB scheme the government guarantees loans to entrepreneurs, allowing banks to issue loans more quickly. The government has already increased the level of the guarantee to 90% for SMEs and 80% for larger companies in connection with the coronavirus crisis. The scheme will be expanded further and will also be applicable to bridging loans and overdraft facilities with a term of up to four years instead of two.

Lower threshold
In addition, it will be easier for entrepreneurs to access the BMKB, as an application can also now be assessed by means of a turnover test and not just on the basis of a detailed liquidity forecast. It is not yet clear what form this test will take.

TOGS scheme
The TOGS scheme is also being relaxed further. Under this scheme entrepreneurs in sectors that have been particularly affected by the crisis, such as catering, can receive a tax-free grant of € 4,000. Up to now this grant has been based on a company’s principal activity, but is now also available if a registered secondary activity of an entrepreneur satisfies the conditions.

Conditions
An additional condition applies in such a case, however: based solely on the registered secondary activity, the entrepreneur must suffer a drop in turnover of at least € 4,000 over the period from 16 March 2020 to 15 June 2020 and must also have fixed costs of at least € 4,000 over that period.

3. NOW scheme expanded for groups

The Temporary Emergency Bridging Fund for Employment (NOW scheme) is being expanded for groups. Operating companies whose turnover drops by more than 20%, but are part of a group that does not meet this condition, can now apply under the NOW scheme, subject to certain conditions.

NOW scheme
Employers who experience a drop in turnover of at least 20% will have up to 90% of their payroll costs reimbursed via the NOW scheme. It no longer matters whether the drop in turnover can be attributed to the coronavirus crisis or other reasons, such as the PFAS and nitrogen problem. The drop in turnover is calculated by comparing 25% of the turnover for 2019 with the turnover generated from March to May 2020. However, employers can also take a period starting one or two months later as a basis for determining their drop in turnover.

Problem with calculating drop in turnover for groups
In the case of groups the turnover for the whole group is taken as a basis. One problem that results from this is that groups within which staff from one company cannot be deployed in other companies (or only to a limited extent) will in some cases not receive any compensation due to the decline in turnover being calculated on a per-group basis. This would be the case, for example, if one group company loses all of its turnover, but the drop in turnover for the group as a whole is less than 20%. This problem has now been resolved by the expansion of the NOW scheme.

Expansion
The expansion means that independent legal entities, e.g. private limited companies, within a group will from now on be able to apply under the NOW themselves. This is subject to the conditions outlined below.

Conditions

Additional safeguards.
A number of additional safeguards are also being incorporated into the NOW scheme to prevent fraud. During the period over which the drop in turnover is measured no orders may be transferred from a company that is taking advantage of the NOW to another company within the group. In addition, changes in inventories will be allocated to turnover. These safeguards are currently being worked out in more detail.

When does it enter into force?
The amendment will be published as soon as possible. This will also indicate when the scheme will enter into force.
4. Lower wage bill during NOW? Be aware of retrospective correction!

What are the consequences under the NOW if your wage bill between March and May is lower compared with your wage bill in January this year? This can have a significant negative impact. Be aware of this, as in these times you will not want to find yourself having to pay back the subsidy you received under the NOW scheme retrospectively.

What amount has to be deducted if your wage bill is lower?
If you apply under the NOW scheme (the main condition is a drop in turnover of at least 20%), up to 90% of your payroll costs will be reimbursed by the government. It should be noted that there is a difference between your wage bill and your payroll costs. Payroll costs are approximated by adding the flat-rate percentage of 30% for additional employer’s contributions to your wage bill.

Deduction
Regardless of the level of the subsidy awarded, 90% of the reduced wage bill is deducted retrospectively from the amount to be subsidised if the wage bill between March and May is lower than the wage bill in January. This means that for each euro by which the payroll costs are lower, the employer receives € 0.90 less in subsidy.

Example
An employer has an estimated drop in turnover of 50%. He therefore receives a subsidy of 90% on 50% of his wage bill. If his wage bill in January was € 1,000,000, this results in a total expected subsidy determined under the NOW of € 1,755,000. An advance is paid at a level of 80%: € 1,404,000.

Over the period from March to May the wage bill is € 600,000 lower. This results in the subsidy being reduced by € 702,000. The ultimate amount of the subsidy is therefore (€ 1,755,000 – € 702,000) = € 1,053,000. This means that the advance payment allocated was too high and a repayment has to be made.

5. In 2020 no adjustment of employer’s unemployment insurance contribution in the event of overtime

If, after the end of a year, it becomes clear that an employee has exceeded his or her contractually agreed working hours by more than 30%, the unemployment insurance contribution must be adjusted with retroactive effect. As a result of the coronavirus crisis, it has been decided that, for 2020 only, this adjustment does not have to be made.

Contracted hours exceeded by more than 30%?
If the number of hours for which an employee receives a wage (paid hours) exceed the contractually agreed hours (contracted hours) by more than 30% in the payroll tax return for the calendar year concerned, an adjustment must be made from the low (2.94%) to the high (7.94%) unemployment insurance contribution. A different situation only applies if at least 35 hours a week have been agreed. In such a case the above rule does not apply and, within the limits set by the Working Hours Act, unlimited overtime may be worked without the employer being required to switch from the low to the high unemployment insurance contribution.

Change
This rule is now having unintended consequences in sectors that need employees to work a considerable amount of additional overtime as a result of the coronavirus crisis, such as healthcare. The Labour Foundation has therefore asked for the rule to be amended. The government has promised to change it temporarily, i.e. for 2020 only.

Generic measure
A targeted sectoral measure would be extremely onerous to implement. For this reason it has been decided that a generic exception covering all employers will apply for 2020 in relation to adjustment of the unemployment insurance contribution in the above situation. A generic solution also avoids any uncertainty with regard to who falls under the exception and who does not.

Please note:
In concrete terms this means that, for 2020, employers do not have to adjust the unemployment insurance contribution on the basis of the situation outlined above.

To make this possible, the Decree adopting an order in council implementing the Social Insurance (Funding) Act and a number of other Acts (‘Besluit Wfsv’) is being amended. The regular situation regarding adjustment of the contribution will take effect again on 1 January 2021.

6. Launch of bridging loan for start-ups and scale-ups

From 29 April 2020 start-ups and scale-ups can approach Regional Development Agencies (ROMs) for a bridging loan: the Coronavirus Bridging Loan (‘Corona-Overbruggingslening’ (COL)). This additional facility is needed, as such companies, being new customers, are having difficulty obtaining finance from banks due to the coronavirus crisis.

Existing schemes insufficient
Up to now, companies in the above category have largely been financed by means of equity, such as retained earnings, or venture capital. However, they have only been able to take advantage of the credit facilities made available to date as a result of the coronavirus crisis to a limited extent.

Contribution from shareholders expected
The value of the loans that the ROMs will provide will range from € 50,000 to € 2,000,000. For amounts above € 250,000 cofinancing of 25% is expected from shareholders or other investors.

3% interest
The interest rate on the loans is 3%. A premium of 2% per year is also paid in the case of loans above € 500,000. The loans have a term of three years, but can be repaid early without any penalty.

For loans of up to € 500,000 the aim is to process applications within four to nine working days. In the case of applications exceeding € 500,000 the aim is to come to a definitive decision within three working weeks.

Not for all sectors
Certain sectors are excluded from the scheme. These are the retail, catering and small business services sectors. Independent entrepreneurs also do not qualify for the credit facility. This is because such businesses can also approach an ordinary bank or Qredits for finance.

For more information see the website of the Regional Development Agencies

7. Wage expenses subsidy (LKS) will not be deducted from contribution under NOW

The contribution towards payroll costs that can be obtained via the NOW scheme does not have to be reduced by any wage expenses subsidy (LKS) that an employer may be receiving for employees with an occupational disability. This has been announced by Tamara van Ark, State Secretary of Social Affairs and Employment.

NOW scheme
Under the NOW scheme employers can get up to 90% of their payroll costs reimbursed by the government if their turnover drops by at least 20%. This scheme replaces the short-time working scheme and has been set up as a consequence of the coronavirus crisis. The drop in turnover does not have to be connected with the coronavirus crisis.

Wage expenses subsidy
The wage expenses subsidy is intended for employers who hire a person with an illness or disability. This subsidy can be obtained for employees who are unable to earn the minimum wage and makes up the difference between the wage value and the minimum wage. It is intended for employees who fall within the target group of the job arrangement for persons with an occupational disability (‘banenafspraak’).

No deduction
Contrary to previous plans, the wage expenses subsidy will not be deducted from the compensation received under the NOW. The fact that this will result in a double contribution towards payroll costs is something that the State Secretary is prepared to accept, partly because the costs are limited.

Notification obligation no longer applies
As a result of the above change, the employer is no longer obliged to notify the local authority, which is responsible for implementing the wage expenses subsidy for employees with an occupational disability, of its application for a subsidy under the NOW scheme.

8. Tozo scheme also open to cross-border workers and persons of state-pension age

Entrepreneurs who live in the Netherlands, but whose business is situated elsewhere in the EU, or vice versa, partly qualify for the Temporary Bridging Scheme for Independent Entrepreneurs (Tozo). In future, persons of state-pension age will also be eligible for support under the Tozo scheme. This was announced by State Secretary Tamara van Ark on Friday, 24 April.

Tozo scheme
Entrepreneurs who have been affected financially by the coronavirus crisis are entitled, under certain conditions, to support to help cover their living costs and/or working capital. To prevent self-employed persons who work across the border from falling between two stools, the government has expanded the scheme.

What do you get where?
Self-employed persons who live in the Netherlands and have their business elsewhere within the EU are therefore entitled to support with their living costs. They must rely on the country in which this business is located for working capital support.

Conversely, self-employed persons who live elsewhere in the EU, but have their business in the Netherlands are entitled to receive working capital support. They must rely on their country of residence for support to help cover their living costs. The necessary conditions must, of course, also be met in these situations.

Application processed centrally
The application for self-employed persons who do not live in the Netherlands will be processed centrally via a single local authority. It is not yet known which local authority this will be.

Working capital support also for persons of state-pension age
Following a motion in the Lower House, arrangements have been made to ensure that self-employed persons of state-pension age also qualify for support with working capital. They are not eligible for support to help cover their living costs.

When does the scheme enter into force?
The scheme is expected to be published in the near future, after which the groups of entrepreneurs in question will be able to submit their applications.

Disclaimer
We have endeavoured to compile these texts as reliably and as carefully as possible. Our organisation cannot be held liable for any inaccuracies they may contain or the consequences thereof.