NOW 2.0 – details and practical information

The Temporary Emergency Bridging Measure for Sustained Employment (Noodmaatregel Overbrugging Werkgelegenheid , the “NOW”) has been in force since March 2020. The Dutch government announced new changes to the NOW and an extension of the measure with four months. Applications for the new NOW measure, starting from July 6, 2020, are subject to additional requirements that have been announced by the Dutch government on May 20, 2020 (“NOW 2.0“). In this alert we will inform you of the NOW 2.0 and the requirements for and application details thereof.

NOW 2.0

In view of the expiry of the first subsidy period per May 31, 2020, the Dutch government has decided to extend the NOW for an additional period of four months. The purpose of the NOW remains unchanged; to enable companies with a turnover loss of at least 20% to retain as many employees as possible. For more information on the (original) NOW, please see our blog from April 8, 2020. For calculating the eligible subsidy under the NOW 2.0, the turnover loss is determined over a four-month period starting on June 1, July 1 or August 1. For applicants that apply for the NOW subsidy for the second time, the turnover period must be continuously to the first period. Applications for the NOW 2.0 are open to both companies that have already submitted an application for a NOW subsidy during the previous subsidy period and companies making a first subsidy application.

For both NOW and NOW 2.0, all governmental subsidies received by companies in the context of the COVID-19 crisis are considered as turnover.

Adjustments

The following conditions have been adjusted for NOW 2.0 compared to the (original) NOW:

  • NOW 2.0 is a subsidy for a period of four months instead of three;
  • the reference month for the wage bill is set at March 2020 instead of January 2020;
  • dismissal of employees on economic grounds is allowed. The company will be required to pay back 100% of the compensation it has received per employee instead of 150%. Hence, there is no penalty for dismissal of employees on economic grounds;
  • in case of a notification as meant in the Collective Redundancy (Notification) Act (Wet melding collectief ontslag) or in case of large layoffs of 20 employees or more on economic grounds, the subsidy amount will be cut by 5%. This 5% cut is in addition to the reduction of the subsidy with the wage bill of the dismissed employees. However, if there is an agreement between the company and the labor union, no reduction will be applied to the subsidy amount;
  • companies are obligated to encourage their employees to request development advice or to receive training to preserve their employment;
  • in case a subsidy is granted at or above the amount for which an auditor’s report is required (i.e. EUR 100,000 advance payment or EUR 125,000 final subsidy), no dividend or bonus may be distributed and no own shares may be acquired over 2020 up to and including the shareholders’ meeting in 2021. For operational companies that apply for NOW 2.0 whilst the group as a whole does not meet the 20% turnover loss as meant in article 7 of the NOW 2.0, this threshold does not apply. They must always adhere to the obligation regarding dividend, bonusses and acquiring of shares. For more information on the latter, please see our blog from May 12, 2020. These operating entities are required to have a statement from both the head of the group (as meant in article 2:406 paragraph 1 of the Dutch Civil Code) and the parent company (as meant in article 2:24a of the Dutch Civil Code) prior to the application, stating that these obligations will be met; and
  • the supplement on wage costs to cover employer costs will be increased from 30% to 40%.

Application and determination of the subsidy

The Dutch government is aiming to open the second application period as of July 6, 2020, whereby an subsidy for the wage bill for the period June, July, August and September can be requested. The application period will be open until August 31, 2020.

After the subsidy period, the company will have to request for the final subsidy amount to be determined. Previously, the Dutch government announced that companies who apply for both NOW and NOW 2.0, will have to request the determination of final subsidy amounts simultaneously. This is no longer the case. The company has the option to either request for two separate final determinations, or to request for one final determination for the NOW and NOW 2.0 simultaneously at the end of the NOW 2.0 subsidy period.

We will inform you of any changes or updates regarding the NOW 2.0. If you require any assistance or have any questions, please do not hesitate to contact us.

Pepijn van Egmond, Anna Fredova and Lotte Smit

Pepijn van EgmondAnna Fredova Lotte Smit

The UBO register and the fund for joint account (fonds voor gemene rekening)

On Friday 15 May 2020 the public consultation by the Dutch Ministries of Finance and Justice and Safety closed for the legislative proposal for the Implementation Act for the Registration of Ultimate Beneficial Owners (“UBO”) of Trusts and Similar Legal Structures.

The legislative proposal is a consequence of the obligation of the Netherlands to implement the fourth EU anti-money laundering directive, as amended by the fifth EU anti-money laundering directive. This EU directive requires the EU member states to provide for a UBO register for trusts and this UBO register for trusts, amongst others, has to include each beneficiary of the trust and, amongst others, the name, birthdate, birthplace, address, fiscal number and type and size of the beneficial interest of the beneficiary. The threshold of a shareholding of 25% plus one share or an ownership interest of more than 25%, as it applies to UBO’s of companies and other legal entities, does not apply to the beneficiaries of a trust.    

Only the name, birth month, birth year, domicile, nationality and type and size of the beneficial interest are accessible by the public through the internet. The other information is only accessible by the Financial Intelligence Unit and certain public authorities. In two situations it is possible to shield this information (except for the type and size of the beneficial interest) at request of the beneficiary from the public. The first situation is that the beneficiary is subject to a disproportionate risk of fraud, kidnap, blackmail, harassment, violence or intimidation through the publication of this information in the register. In order to be able to use this exception it is required that the beneficiary is under police protection. The second situation is that the beneficiary is a minor or lacks capacity for another reason.     

In the fifth EU anti-money laundering directive, the European Commission called for the EU member states to notify it of any legal structures that are similar to the trust. These would then have to be included in the UBO register for trusts on a similar basis. The Netherlands has consequently notified the European Commission that it regards the “Fund” as a similar legal structure as the trust. Subsequently the Dutch legislator has made it clear that the open and closed fund for joint account (“FGR”) are considered to constitute such a “Fund”. This has the unfortunate consequence that each beneficiary of an FGR has to be included in the UBO register for trusts with the information set out above. Especially in an open FGR the beneficiaries can change on a daily basis and there are beneficiaries with very small beneficial interests with a corresponding small risk of money laundering or financing of terrorism.       

Our expectation is that the obligation to provide this information about each beneficiary of the FGR will lead to an unmanageable stream of information between the manager of the FGR and the manager of the UBO register. In addition, we think that an FGR in its usual form is not a similar legal structure as a trust. You can read more about this in the attached response to the legislative proposal which we submitted on Thursday 14 May 2020 to the legislator.

If you have any questions about this subject, please approach your usual contact at Van Campen Liem or, alternatively, please contact Diederik Palstra, 020-7601613, Diederik.Palstra@vancampenliem.com.

Diederik Palstra