11 November 2021
R&I Update – November 2021 – 5 of 5 Insights
During the COVID-19 pandemic, the Dutch government allowed 376,000 Dutch businesses to defer tax payments amounting to around €42 billion. As at 29 September 2021, 274,000 businesses still owe approximately €20 billion in tax debts.
Most of the Dutch government's pandemic-related financial support measures ended on 1 October 2021, so businesses must now meet their tax liabilities as they fall due. However, the Dutch Tax Authority has implemented several new temporary measures to support businesses with repaying their tax debt.
The new measures include:
The government has explicitly chosen not to cancel tax debts because a full or partial cancellation of debts would be unjust and unfair to businesses that have already paid their tax debts.
As an additional temporary measure to support viable businesses proposing restructuring plans, the Dutch Tax Authority will also temporarily settle its claim at the payout ratio offered to unsecured creditors (instead of its requirement for double the ratio paid to unsecured creditors). This temporary policy will run from 1 August 2022 to 20 September 2023 and will make restructuring plans more likely to succeed.
The Dutch Tax Authority's temporary measures give businesses breathing space and offer viable companies more possibilities when restructuring their debts. To discuss these measures in more detail, please reach out to a member of our Restructuring & Insolvency team.