Update of yesterday’s report on the measures taken in relation to the coronavirus
In a letter last night, the Cabinet announced the following additional measures because of the coronavirus.
Recovery and tax interest temporarily to 0.01%
If an assessment is not paid on time, normally 4% collection interest must be paid from the moment the payment term has expired. In order to facilitate businesses that easily apply for deferment of payment, the Cabinet will temporarily reduce the collection interest from 4% to 0.01% for all tax debts from 23 March 2020. Because it is not technically possible to reduce the percentage to 0%, the percentage will be set at 0.01%.
Tax interest is due on tax that has to be paid after the end of the tax year in question. The tax interest is calculated as from 1 July following the year to which the additional tax to be paid relates. The tax rate is 8% for corporate income tax and 4% for other taxes. The percentage of the tax interest is also temporarily reduced to 0.01% for all taxes for which tax interest is payable. For implementation reasons, the reduction will take effect on 1 June 2020. The only exception to this is the reduction of the tax interest rate on income tax; this reduction will take effect on 1 July 2020.
No default penalty
The Cabinet states that the Tax and Customs Administration will not impose a default penalty for failure to pay tax (on time) in the coming period.
Deferral of payment
In yesterday’s report, we indicated that a statement from a third party expert should be attached immediately to the request for postponement of payment. It has now been decided that this statement must be submitted to the Tax and Customs Administration within two weeks after the request has been made.
Wage costs to be paid
A Temporary Emergency measure Bridging for Work (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud) will be opened as soon as possible. This temporary emergency measure, also referred to as NOW, replaces the current regulation on short-time working, which we explained in our announcement yesterday. It will no longer be possible to submit new applications for the reduction of working hours. The NOW reads as follows: employers who have to deal with at least 20% expected loss of turnover can apply to the UWV for a period of three months – related to the loss of turnover – an allowance in the wage costs of up to 90%. On the basis of the application, the UWV will provide an advance of at least 80% of the requested allowance. Afterwards, the actual loss of turnover will be determined and a subsequent payment or recovery will follow on this basis. Entrepreneurs can apply for compensation for a loss of turnover from 1 March. The compensation on the basis of the NOW can only be applied for once the government has opened a portal for this purpose.
Temporary extra assistance for entrepreneurs/zzp’ers
The Cabinet will establish a temporary scheme that will be implemented by municipalities. Self-employed persons may receive additional income support for maintenance for a period of three months through an accelerated procedure. This means that the income will be supplemented to the social minimum. The amount of the income support depends on the income and the composition of the household and amounts to a maximum of EUR 1,500 net per month. The allowance is a gift and therefore does not have to be repaid. This temporary income support scheme does not include a capital or partner test. Support under this temporary scheme is also possible in the form of a loan for working capital (up to a maximum of EUR 10,157) at a reduced interest rate.
An emergency counter will be set up to provide compensation in the form of a gift for the first need of entrepreneurs who have been directly affected by government measures to combat the corona crisis and who, as a result, see their turnover disappear entirely or to a large extent. This applies in particular to eating and drinking establishments and other establishments that are forced to cease most of their activities, such as beauty salons and others that may run into difficulties because of the 1.5-metre distance requirement. These should be establishments with a physical facility outside their own home. The allowance is a one-off lump sum of EUR 4,000 for the three-month period and applies only to enterprises which, in terms of type and sector, meet at least the above conditions. The conditions are currently being worked out (and can be updated at any time).
In addition to the above measures, a number of other compensatory or expansionary measures have been taken for the hospitality and travel sector. You will find more information about this in the letter from the Cabinet.