As of October 1, the Dutch government has stopped most of the generic financial support measures that have helped the Dutch economy as much as possible through the COVID-19 pandemic over the past eighteen months. In this alert we provide a brief overview of the relevant measures for businesses that have ended or will shortly end.
Temporary Emergency Bridging Measure for Sustained Employment (‘NOW’)
Because the corona crisis and contact restriction measures were longstanding, multiple programs of the NOW were opened after the first subsidy program. As it is a real scenario that no restrictions and contact restriction measures will be in place in the fourth quarter, the government has confirmed that as per October 1, 2021, the NOW will not be renewed.
Reimbursement Fixed Costs (‘TVL’)
In March 2020 the Reimbursement for entrepreneurs in affected sectors (‘TOGS’) was introduced to help small and medium-sized businesses during the pandemic. The TVL is the successor of the TOGS. Businesses that have suffered turnover loss of at least 30% during 3-month periods and cannot pay their fixed costs due to the pandemic, are eligible for the TVL. The application deadline for TVL Q3 is October 26, 2021, 17:00 hours. Businesses that are eligible for TVL Q3 can also apply for reimbursement of turnover loss caused by the Limburg floods. The Dutch government has decided, however, that the TVL will not be extended until the fourth quarter of 2021. The support measure has therefore ended as per October 1, 2021.
Credit extensions and loans
In order to continue to support companies in their liquidity needs, several guarantee measures were implemented in the past year. The special COVID-19 Corporate Financing Guarantee (‘GO-C’) and COVID-19 Credit Guarantee scheme for small and medium-sized enterprises (‘BMKB-C’) are still in effect. The application deadline of the GO-C and BMKB-C is extended until December 31, 2021, 17:00 hours. The other guarantee measure, the Corona Bridging Loan (‘COL’), already ended on May 16, 2021.
Practical Corporate Measures
Temporary Act COVID-19 Justice and Security (‘Temporary Act’)
Under the Temporary Act, it is possible to deviate from any provisions in the articles of association that require holding physical shareholder and board meetings. The Temporary Act makes it possible to keep the shareholder meeting completely virtual under certain conditions. There is no obligation for the companies to offer remote voting online. It is sufficient that shareholders can follow the meeting via a live stream and submit questions in advance. The Temporary Act is again extended and now applies until December 1, 2021.
Tax payment deferral (Bijzonder uitstel van betaling vanwege coronacrisis)
The possibility to apply for a tax deferral has ended as per October 1, 2021. Under the emergency payment deferral regime, taxpayers could request a deferral for payment for, for example, the corporate income tax (‘CIT’) and value-added tax. The term for paying off the tax debt has been set to 60 months. The starting date of the payment schedule that was set to commence on October 1, 2021, has been further pushed back and extended to October 1, 2022. New tax liabilities that arise on or after October 1, 2021 have to be settled in the regular (pre-COVID-19) manner.
Reduction of interest on tax (belastingrente) and interest on late payment of taxes (invorderingsrente)
Interest on tax becomes payable if a company files tax returns late or incorrectly. The Dutch tax authorities have temporarily reduced the rate to 0.01% for all taxes subject to interest on tax. As of October 1, 2020, the rate was increased to 4% for all taxes. The normal (pre-COVID-19) rate of 8% will be back in force as per December 31, 2021. In August 2020, the late payment interest (invorderingsrente) was reduced to 0.01% until 31 December 2021, after which it is set to return to normal (pre-COVID-19) 4%. The return to 4% will now, however, be phased in as follows: the rate will be 1% from January 1, 2022; 2% from July 1, 2022; 3% from January 1, 2023, and 4% from January 1, 2024 onwards.
The termination of the aforementioned measures will have financial consequences for many companies. The government is currently working on separate support measures for sectors that will still face COVID-19 restrictions. It is uncertain how and when these support measures will take effect and unfold. If you have any questions with regard to (the ending of) the COVID-19 support measures, please do not hesitate to contact us.
Can Bahtir and Eva Klein Obbink