Pandemic support measures for businesses extended
On 27 May 2021, the Dutch government announced that a number of Covid-19 related emergency relief measures for entrepreneurs are to be extended through the third quarter to 30 September 2021. This article sums up the most important measures and also discusses pandemic related adjustments to tax measures.
We will be looking at the following measures:
• Pandemic-related tax measures
The government has emphasized that the relief packages expand and contract in line with a the loss of income suffered by the business. The greater the loss in turnover, the greater the support, but the more a business manages to turn over in spite of the pandemic, the more it will outgrow the relief packages.
Temporary Emergency Bridging Measure for Sustained Employment (NOW)
NOW will be extended through the third quarter of 2021. Through this scheme, businesses can reclaim a large portion of their wage costs if they expect a loss in turnover of at least 20 per cent. This subsidy gives businesses the flexibility to continue paying wages so they can hold on to staff.
Following two earlier versions, NOW3 came into force in October 2020. This version covers three periods and remains in effect until 1 July 2021.
• NOW3.1 from 1 October 2020 through 31 December 2020
• NOW3.2 from 1 January 2021 through 31 March 2021
• NOW3.3 from 1 April 2021 through 30 June 2021
To apply for NOW for April, May and June 2021, submit your application on the website of Employee Insurance Agency UWV by midnight Wednesday 30 June 2021.
Reimbursement of Fixed Costs (TVL)
Small and medium-sized enterprises can no longer apply for TVL for the first quarter of 2021. As this scheme did not become available for large businesses until later, they have until 10 June 2021 to apply for TVL Q1. The government is likely to extend TVL,-so that entrepreneurs having difficulties paying their fixed costs can also apply for the subsidy for the next quarter. TVL Q2 2021 is expected to open for applications in the second half of June.
As from 31 May, self-employed and SME start-ups can also apply for TVL. To be eligible, they must provide evidence that they suffered a loss in turnover of at least 30 per cent in the first quarter of 2021., compared to the third quarter of 2020. These start-ups need to have been registered with the Chamber of Commerce between 1 October 2019 and 30 June 2020, and they may not be part of another company.
Temporary Bridging Scheme for Independent Entrepreneurs)
The Dutch cabinet has announced its intention to extend Tozo through Q3. Tozo provides a subsistence allowance to self-employed persons if their income has fallen below the social minimum as a result of the pandemic, and working capital loans to address liquidity issues.
First repayments of Tozo-loans have been moved six months forward to 1 January 2022. Until that date, no interest will be charged. The term of the loans has been extended from 42 to 60 months.TONK (Temporary Support for Essential Costs)
Temporary Support for Essential Costs (TONK)
TONK is available for households, including those of entrepreneurs, whose income has declined as a result of the pandemic to such a low level that they can no longer pay essential home-related costs. If other schemes do not provide sufficient support, you can apply for TONK. TONK is based on the special assistance offered by local authorities and opened for application in March. If needed, you can apply for retroactive payment from 1 January 2021. Submit your application on the website of your local council.
Tax measures related to the Covid-19 pandamic
Has your business received a one-off grant of €4,000 on the basis of TOGS (Compensation for Entrepreneurs in Affected Sectors Covid-19)? This grant is tax-exempt. The same applies to TVL (Reimbursement of Fixed Costs) and TONK (Temporary Support for Essential Costs). Payments received under NOW (Temporary Emergency Bridging Measure for Sustained Employment), on the other hand, do qualify as taxable income.
Tax debt and interest
Entrepreneurs with pandemic-related tax debt have been given more time for repayment. The date on which repayments must begin has been moved forward to 1 October 2022. Moreover, contrary to what they were told in October 2020, they will be given five years to pay off their tax debt. The late payment interest will be raised step by step to 4 per cent on 1 January 2024. Debt aside, however, entrepreneurs must start paying taxes as usual from 1 July 2021.
Fixed travel allowances to remain tax-free until 1 October 2021
If your employees are paid a fixed travel allowance, there is no need to adjust this if they work from home. Until 1 October 2021, you are allowed to pay them their fixed travel allowance free of tax, on condition that the fixed allowance had already been awarded to them before 13 March 2020.