On March 17, 2020 the Dutch government announced a number of economic measures in light of the Corona crisis. With these measures, the Dutch government wants to ensure that companies can continue to pay their employees, self-employed workers are given a financial bridge during this time and the government has allowed for compensation and additional credit facilities as well as a lenient tax facilities.
In more detail, the measures entail the following:
The temporary scheme for compensation (“Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud”) will replace the current scheme. An entrepreneur or company who expects a loss of turnover (of least 20%) can apply at the Employee Insurance Agency (“UWV”) for a salary contribution for their employees for a period of three months. The contribution amounts to a maximum of 90% of the wage bill, depending on the loss of turnover. Entrepreneurs can apply for the compensation for a decrease in turnover from 1 March. One of the conditions when receiving such salary contribution is that no employees may be dismissed for commercial reasons during the subsidy period.
To support self-employed workers, the government has introduced an arrangement to be implemented by Dutch municipalities. This arrangement includes the possibility for self-employed workers to receive additional income support for a period of three months through an accelerated procedure. This additional support will supplement the income to the social minimum and does not have to be repaid. There is no asset or partner test. Support under this temporary arrangement is also possible in the form of a capital loan at a reduced interest rate.
This measure makes it possible for companies to apply for a deferral of the payment of taxes. In case a company has made such a request, the Tax Authorities (“Belastingdienst”) will stop the collection of taxes immediately. This applies to income taxes, corporate taxes, wage taxes and turnover taxes (VAT). Moreover, the recovery interest, which normally is at 4%, is temporarily reduced to almost 0%. Furthermore, any penalties for late payment do not have to be paid.
Businesses which experience difficulties in obtaining bank loans and bank guarantees can use the Business Finance Guarantee Scheme. The government has proposed to increase the Scheme’s guarantee ceiling from 400 million to 1.5 billion euros. With this Scheme, the government will help both SME’s and large companies by providing a 50% guarantee on bank loans and bank guarantees (with a minimum of 1.5 million euro and a maximum of 50 million euros). The maximum per company is temporarily increased to 150 million euros.
Microcredit provider Qredits has already financed and coached a large group of small and starting entrepreneurs, who often find difficulties to obtain financing through the bank. Qredits has opened a temporary measure for entrepreneurs who are affected by the Corona crisis, namely a deferral of repayment for six months and the interest rate during this period is automatically reduced to 2%. The government has mentioned that it is willing to support Qredits with this measure with a maximum of 6 million euros.
A temporary guarantee for agricultural and horticultural companies regarding working capital will be provided under the Guarantee for SME-Agricultural Credits (“Borgstelling MKBLandbouwkredieten”, in short BL). The government aims to open this temporary expansion of this guarantee as soon as possible.
The government is currently in consultation with the Association of Dutch Municipalities (“Vereniging Nederlandse Gemeenten”, in short VNG) to discuss the possibility of the withdrawal of (provisional) local assessments on companies. This particularly concerns tourist taxes. The government is also in consultation with the culture sector in order to find the appropriate measures.
The government realizes that the current measures which have been taken to protect the health of the Dutch citizens and to prevent the further spread of the Corona virus as much as possible have enormous consequences for the incomes in a number of sectors (eg the travel industry, restaurants and other companies involved in food and beverages).
The government is therefore currently coming up with a compensation scheme with the appropriate and necessary measures for companies in the aforementioned sectors. This compensation scheme will soon be submitted to the European Commission for the assessment of (lawful) state aid.