New measures to protect jobs and economy in times of corona crisis
The consequences of the spread of the coronavirus (COVID-19) in the Netherlands are becoming increasingly clear. According to the latest figures of 19 March 2020 from the National Institute for Public Health and Environmental Protection (RIVM), there are currently 2460 people in the Netherlands infected with the virus, and 76 have died as a result of the virus. The economic consequences are now also noticeable.
On 17 March 2020, the Dutch Government presented the emergency package for jobs and the economy, containing far-reaching measures aimed at "protecting not only our health, but also jobs and income and cushioning the consequences for self-employed persons, SME entrepreneurs and large companies. The measures ensure that businesses can continue to pay their employees, provide a bridge for the self-employed and enable money to remain in businesses through more flexible tax regimes, compensation and additional credit opportunities".
Below, I will present a brief overview of the measures presented by the Dutch Government.
1. Setting up a temporary scheme for the compensation of wage costs
An entrepreneur who expects a loss of turnover of at least 20% can apply to the Employee Insurance Agency (UWV) for a period of three months for an allowance in the wage costs of up to 90% of the wage bill. The amount of the allowance depends on the loss of turnover. The UWV will provide an advance payment of 80% of the requested allowance. The purpose of this measure is to enable companies to continue to pay their employees.
For a detailed explanation of the temporary scheme, I refer to the news item "Introduction Temporary Emergency Measure Bridging Work for the Preservation of Work: a considerable reduction in labour costs for employers affected by corona" by Sam van Well, published on our website on 18 March 2020.
2. Additional support for independent entrepreneurs
Self-employed entrepreneurs can receive additional income support for a period of three months through an accelerated procedure. This income support supplements the income up to the social minimum and is non-refundable.
3. Relaxation of tax deferrals and reduction of fines
Entrepreneurs can more easily apply for tax deferrals. In that case, the Tax Authorities immediately cease to collect taxes due. The taxes covered by this rule are income, corporation, wage and turnover taxes. Any default fines for not paying the taxes on time do not have to be paid. The entrepreneur is also given more time to provide evidence. In addition, the interest on overdue tax is temporarily reduced to almost 0%.
4. Extension of the Guarantee Scheme for Entrepreneur Financing
If Enterprises are having problems obtaining bank loans, they can make use of the Guarantee Entrepreneur Financing Scheme. The Government proposes to increase the Guarantee Entrepreneurial Finance Scheme's guarantee ceiling from) EUR 400 million to EUR 1.5 billion. The Guarantee Entrepreneur Financing Scheme will help both SMEs and large enterprises by providing a 50% guarantee on bank loans and bank guarantees.
5. Interest rebate for small entrepreneurs on microcredits
Qredits, a provider of microcredit aimed at small businesses and start-ups, is introduced a temporary crisis measure: for small entrepreneurs that run into difficulties due to the corona crisis, a deferral of repayment is offered for a period of six months. In addition, the interest rate is automatically reduced to 2% during this period.
6. Temporary guarantee for agricultural and horticultural businesses
A special scheme will be introduced for agricultural and horticultural businesses: a temporary guarantee will be introduced for working capital under the SME Agricultural Credit Guarantee Scheme. By means of this scheme, the State guarantees the loans of agricultural entrepreneurs. The measure will apply from 18 March 2020.
7. Consultation on tourist tax and the cultural sector
The Cabinet will consult with the Association of Netherlands Municipalities on the possibility of stopping (provisional) local tax assessments being imposed on entrepreneurs and revoking tax assessments already imposed. This concerns in particular the tourist tax. In addition, the government is in consultation with the cultural sector in order to assess whether generic measures and possible special measures can be applied, if necessary.
8. Compensation scheme for specific sectors
The Government measures have major consequences for income in a number of sectors, specifically the compulsory closure of the hospitality industry and the countless cancellations in the travel sector. The loss of income in these sectors can hardly be made up when the corona crisis is over. The Government therefore proposes a compensation scheme with appropriate measures for businesses in the sectors mentioned. This scheme is currently being worked out and will be submitted to the European Commission for the assessment of whether (lawful) state aid is involved.
If you have any questions about the measures introduced by the Dutch Government, please do not hesitate to contact us.
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Rens M.R. Berrevoets
Teléfono: +31 (0)20 312 28 79