On 12 March 2020, the Dutch government announced several measures to support the business community in response to the Coronavirus (COVID-19). These key measures include:
Deferral of payment
The Dutch government has declared that the tax authorities will grant a deferral payment of VAT, personal income tax, payroll and corporate income tax payable. So, taxpayer can apply for a payment extension for income tax, corporate tax, payroll tax, and turnover tax (VAT). The tax authorities will put on hold any measures in place to collect payment immediately upon reception of such request.
Reduction of provisional assessments
If the tax authorities impose a provisional assessment during the financial year and it appears that the profit for tax purposes will be less than the profit estimated on the provisional assessment, a reduction of the provisional assessment can be requested. This will immediately result less tax to be paid.
No default penalty
The Dutch tax authorities will refrain from imposing default penalties or will reverse any such penalties that were imposed for non-payment or late payment of tax.
Loss set-off
If business expects to incur a loss for the financial year 2020, whether or not due to the Coronavirus outbreak, it may be useful to file a income tax return immediately after the end of the financial year and request that this loss is provisionally set off against the profit for 2019. Then 80% of the reported loss will be taken into account. The amount of tax payable or paid for the 2019 financial year can then be reduced or recovered, in whole or in part.
Interest on tax
The interest on overdue tax normally levied after the term of payment has expired will be temporarily lowered from 4% to 0.1% with effect from 23 March 2020. This rule will apply to all tax debts. The rate for interest on tax will be temporarily lowered to practically 0% as well. This reduction will apply to all types of tax that are subject to interest on tax.
VAT refunds
If business entities do not able to pay their debts due to the Coronavirus outbreak, then the VAT remitted in this regard can be refunded, subject to conditions.
Financing scheme
Companies that are having difficulty obtaining bank loans and bank guarantees will have recourse to the Guarantee Corporate Financing scheme (GO scheme). The government has proposed that the guarantee ceiling for the GO scheme be increased from €400 million to €1.5 billion. The scheme will allow the Ministry of Economic Affairs and Climate Policy to help small and medium-sized enterprises by guaranteeing 50% of the amount of their bank loans and bank guarantees (between €1.5 million and €50 million per company). The maximum guarantee to be awarded to a company will temporarily be raised to €150 million.
Interest-rate deduction
Qredits, a provider of microcredit, finances and coaches a large number of small start-ups, which generally have difficulty obtaining loans from a bank. Qredits is implementing a temporary emergency measure, under which small companies impacted by the coronavirus pandemic will be granted a 6 month deferment of repayment, and the interest rate on their loans will automatically be lowered to 2% during this period. The government will allocate up to €6 million to Qredits to allow it to implement this measure.
