On Tuesday evening, 17 March, the government has published a comprehensive support package designed to help Dutch companies and self-employed persons without employees through the Corona crisis. “Exceptional times call for exceptional measures,” according to Minister Hoekstra. The support package serves to keep the liquidity of companies at the required level as well as to prevent mass redundancies. On this page we keep you up to date about the undertakings and consequences for you as an entrepreneur.
Please note: this page was updated recently at 16:00 hours on 20 March. Naturally, both the facts and specific situation play major roles where they concern the formulation of correct answers to the question. If you would like to be certain which rules apply to you or what you should do in a specific situation within your organisation, please get in touch with us using the contact details set out at the bottom of this page. We are pleased to help you!
Briefly summarised: an overview of the measures
- The government has introduced a new, much more generous scheme for reduced-time working, which replaces the old scheme known as the Employment Bridging Emergency Fund (Dutch: Noodfonds Overbrugging Werkgelegenheid). This is subject to the condition that companies cannot dismiss their employee and that they continue to pay the employee’s salary during this period. This scheme also applies to flexible workers and employees with a zero-hour contract.
- The approximately 1.2 million self-employed persons without employees will also receive assistance. This scheme, which applies to three months of aid, supplements the income of independent entrepreneurs up to the social minimum (social assistance benefit level). Those receiving this aid do not have to refund this amount.
- All entrepreneurs have the right to apply for special postponement of tax payment. Collection by the tax authorities will stop immediately, and the application will be verified at a later moment.
- The government will make ten to twenty billion euros available for the support of these measures in the coming three months.
Measure 1: The reduced-time working scheme (Dutch: regeling Werktijdverkorting) is to be replaced with the temporary measure, Employment Bridging Emergency Fund
As an entrepreneur, do you expect a loss of sales (at least 20%)? If so, you have the right to apply for an allowance towards wage costs from the Employee Insurance Agency (UWV) for a period of three months (for maximum 90% of the wages owed, depending on the loss of sales). The UWV will provide an advance of 80% of the allowance requested. The actual loss of sales will be determined at a later moment. This scheme applies to decreases in sales as from 1 March 2020; an auditor’s report is required in connection with large applications.
The allowance provides for the wage costs of permanent employees and employees with a flexible contract as long as they remain employed during the application period. This period can be extended once within three months. This will help you to continue to pay your employees. Read more about the Employment Bridging Emergency Fund (NOW) >
Measure 2: Additional support for self-employed persons without employees
The government has introduced a more relaxed, temporary scheme to support independent entrepreneurs, including self-employed persons without employees, to aid them in continuing their business. This scheme is implemented by the municipalities.
Independent entrepreneurs can apply for support for a three-month period in the way of an additional payment for living expenses and/or working capital. The payment for living expenses is meant to supplement the income to the social minimum and does not have to be paid back. Independent entrepreneurs may apply for a loan intended as working capital against a reduced interest rate to resolve liquidity issues.
This temporary assistance scheme for independent entrepreneurs does not involve a means verification or a partner income verification. The verification for feasibility included in the Social Assistance (Self-Employed Persons) Decree (Bbz) will not be applied, which allows for the speedy handling of applications. This means that income support for living expenses is provided within four weeks instead of the customary thirteen weeks, for a period of at most three months. In this way, a system of advance payments may be applied.
Measure 3: The emergency desk
An emergency information desk will be introduced in the form of a gift, which will allow for relief to address entrepreneurs’ most pressing needs. This constitutes an emergency facility in addition to the other measures in this letter. In particular, this concerns catering and other establishments that are forced to cease most of their activities; for example, hair salons, spas and other parties that may wind up in trouble as a result of the 1.5-metre distance requirement. Their income will reduce to a large extent, whilst their overheads simply continue and, in many cases, their expenses have already been made. Furthermore, it will be difficult for them to recover this lost income once the COVID-19 outbreak has ended. This relief is subject to the condition that it concerns companies with a physical establishment outside a private residence. It concerns a one-off fixed amount of €4,000 for the period of three months and applies only if your business complies with at least with the abovementioned conditions in regards to type and sector. The conditions are currently being expanded on and updated as necessary.
Measure 4: More lenient postponement of tax payments and reduction of fines
The Dutch tax authority allows you to request special deferral of payment due to the impact of the COVID-19 Corona virus. This applies to all assessments of income tax, corporate tax, turnover tax (VAT/BTW) and payroll taxes.
In your payment deferral request application, you explain that you have come across payment problems due to the COVID-19 Corona virus. You will automatically receive a 3-month extension of payment. For some, a payment delay of 3 months may be too short a time period. You can also request an extension for a longer period of time. In that case, additional information is required, and possibly a statement from a third-party expert.
You will not have to pay any fines in connection with failure to pay turnover tax or wage tax on time. The interest on overdue tax, which normally accrues after the payment term has expired, will be reduced temporarily from 4% to almost 0%. The interest on tax rates will also be reduced temporarily to almost 0%. This reduction will apply to all taxes to which an interest on tax rate applies. The government will adjust the interest on tax rates as soon as possible.
Reduction of the provisional assessment
The provisional assessment may be reduced if you expect lower profits as a result of the outbreak of the Corona virus, and if a provisional income tax assessment for 2020 or a corporation tax assessment for 2020 has already been imposed.
- Temporary expansion BMKB scheme (loan under the government-guaranteed scheme for loans to small and medium-sized enterprises). The government guarantees 75% of the additional facility for credits (loan or current account) that are provided to deal with liquidity deficits. The maximum guarantee amounts to €1,500,000 and the term is maximum 8 quarters. The guaranteed fee is 3.9% and the bank determines a risk surcharge and possibly a handling fee for each application.
- Temporary expansion of the Business Finance Guarantee Scheme (GO scheme). The overall GO budget is increased from €400 million to €1.5 billion. The government guarantees 50% of the new credit facility (bank loans and bank guarantees). The minimum amount per company is €1.5 million, the maximum amount is increased temporarily from €50 million to €150 million.
- Qredits provides micro credits. Qredits offers entrepreneurs a temporary postponement of repayment for a period of at most six months. Moreover, interest is reduced to 2.0% during this period. The government supports these measures for up to €6 million.
- There is also a temporary expansion of the government-guaranteed scheme for loans to small and medium-sized enterprises: agricultural credits. The guarantee amounts to 70% of the loan with a maximum term of 8 quarters.
- There is consultation between the Central Government and the municipalities concerning the possibility of stopping local taxes such as tourist tax, and withdraw assessments are already being imposed. The Central Government is also consulting as to support measures with the cultural sector.
The letter to the House of Representatives concerning the jobs and economy emergency package (NL) includes the elaborated overview and reasons for the emergency measures.
Generous banking policy
- In addition to the Dutch government's extensive support package, banks have also come up with joint measures to give business customers a little more breathing room. Businesses that are fundamentally healthy can receive a six-month grace period on their current loans. Those participating include ABN AMRO, ING, Rabobank, de Volksbank, Triodos Bank and BNG Bank.
- The banks’ joint approach offers business customers in all sectors extra financing of up to 2.5 million euros. Banks will closely monitor further developments for groups with a higher liability. This can lead to extra steps in consultation with the ministry and the supervisors. This concerns a minimum scheme that enables banks to provide additional customisation for business customers.
- Looking at the three major Dutch banks, ABN AMRO goes the furthest in suspending repayment obligations. For the previously mentioned target group, not only the repayment obligation but also the interest payments are suspended for a standard period of six months. If customers do not want to make use of this, they must report it.
- An arrangement will also be made for entrepreneurs who are in danger of getting into trouble with their private finances; for example, if they are unable to pay their home mortgage.
Both Rabobank and ING have opened an online portal in which entrepreneurs can submit their request to postpone repayments. Please note that applications will be assessed individually and in order of receipt.
Where can you turn as an entrepreneur?
- Banks can submit the registrations for the relaxed credit arrangements (BMKB and GO) to the Netherlands Enterprise Agency (NL), which is the implementing organisation of the Ministry of Economic Affairs and Climate Policy. In this case, you register with your credit provider.
- You can apply to the Tax and Customs Administration Corporation via Belastingdienst.nl/coronavirus (NL). Schemes introduced by the Ministry of Social Affairs and Employment will be made available as soon as possible.
- Please visit Rijksoverheid.nl/coronavirus (NL) or RIVM (NL) if you have other questions concerning the Corona virus.
- Would you like to learn more about the labour law consequences for your employees? Read through the frequently asked questions.
- You can also read more about the Employment Bridging Emergency Fund (NOW) and the consequences of the Corona virus for your ongoing contracts on our website.
HLB is pleased to help you
Would you like to discover what schemes apply to your company? Or you do require assistance in your application to the new measures? HLB is pleased to help you. Get in touch with us via the contact details provided below or reach out to your contact person(s) at your HLB office. Our advisors are ready to help you!