Emergency government support package for Dutch businesses

On Tuesday 17 March, the Dutch government decided to take unprecedented economic measures to combat the impact of coronavirus. Besides protecting health, the measures are designed to protect jobs and livelihoods and reduce the impact on self-employed people, small and medium-sized enterprises, and major companies. The package of measures will provide billions of euros in support every month for as long as necessary.

The measures ensure that businesses can continue to pay their employees, provide a bridging arrangement for self-employed people, and enable business to access sufficient cash through relaxed tax schemes, allowances and additional possible lines of credit.

1. Implementation of temporary scheme allowing companies to apply for help in paying their labour costs

Businesses that expect to lose at least 20% of their turnover can apply to UWV for an allowance to help pay labour costs for a period of three months. The allowance is a maximum of 90% of the business’s wage bill, depending on the size of the drop in turnover. UWV will provide an advance equal to 80% of the requested allowance. This will enable businesses to continue to pay their employees. To be eligible, a business must not lay off any employees for economic reasons during the period covered by the allowance.

This Temporary Emergency Bridging Measure for Sustained Employment (NOW) will be made available as soon as possible and will replace the existing short-time working scheme. An immediate stop has been placed on the submission of new applications for short-time working to the Ministry of Social Affairs Employment. We therefore do not yet know when, or how, applications can be made for this temporary allowance. Until that time, you must continue to pay your employees their full salary.

If you have already submitted an application for short-time working but your application has not been handled, it will be dealt with under the terms of the new scheme. Businesses can apply for an allowance for any drop in turnover experienced since 1 March 2020.

2. Additional support for independent entrepreneurs

The government is implementing a temporary scheme with relaxed rules to support independent contracts so that they can continue their activities. The scheme will be administered by municipalities. Independent entrepreneurs (including self-employed persons) will be able, under an accelerated procedure, to obtain additional income support to help pay their living expenses for a period of three months. This will top up their income to the level of the guaranteed minimum income and does not need to be repaid. This temporary benefit scheme for independent entrepreneurs does not include a means test or a partner’s income test. Under this temporary scheme, independent entrepreneurs may also apply for support in the form of a working capital loan with a reduced interest rate.
We therefore once again need to wait and see how the municipalities will implement the scheme. The government is currently working night and day to make the schemes accessible.

3. Relaxation of rules on deferment of payment of tax and reduction of fines

Applying for a deferment of payment of tax is to be made easier for affected businesses. If a business submits an application, the Dutch Tax and Customs Administration will stop collecting taxes from it immediately. This applies to income tax, corporate income tax, payroll tax and value added tax (VAT). Any fines imposed for late payment of tax do not need to be paid. Moreover, businesses do not have to submit evidence at the same time as their application. You must submit supporting evidence in the form of a statement from an expert within four weeks.

The rate of interest on overdue tax that would normally be charged once the payment deadline has passed is being reduced from 4% to 0.01% for the time being. This will apply to all tax debt. The rate of interest on unpaid tax is also being reduced to almost 0.01% for the time being. The lower interest rate applies to all taxes on which interest on unpaid tax is payable. The temporary reduction in the rate of interest on unpaid tax will come into effect on 1 June 2020 for all taxes with the exception of income tax. The reduction will apply to income tax with effect from 1 July 2020.

4. Expansion of GO business loan guarantee scheme

Businesses that are experiencing difficulty obtaining bank loans and bank guarantees may make use of the GO business loan guarantee scheme (Garantie Ondernemersfinanciering). The Dutch government intends to raise the guarantee ceiling for the GO scheme from € 400 million to € 1.5 billion.

Through the GO scheme, the Dutch Ministry of Economic Affairs and Climate Policy supports SMEs and large companies by providing a 50% guarantee for bank loans and bank guarantees (minimum of € 1.5 million – maximum of € 50 million per business). The maximum amount per business is to be temporarily increased to € 150 million. The government is committed to providing all guarantees required.

Read this step-by-step plan to find out more about what you can do to manage your finances during this crisis.

5. Reduction of interest rate on Qredits microcredit for small businesses

Qredits, which provides microcredit on behalf of the government, finances and coaches a large number of small start-ups that often have difficulty obtaining finance from banks. These businesses are active in sectors including hospitality, retail, personal care, construction and business services.

Qredits is implementing a temporary emergency measure, under which small businesses that are affected by the coronavirus crisis are allowed to defer repayments for a period of six months, during which the interest rate will be automatically reduced to 2%. The government is allocating up to € 6 million to support Qredits through this measure.

6. Temporary guarantees for agricultural and horticultural businesses

A temporary working capital guarantee will be introduced for agricultural and horticultural businesses under the SME credit guarantee scheme for small and medium-sized farms (BL). In doing so, the government will guarantee loans to such businesses. The government aims to make this temporary expansion of the scheme accessible in the very near future.

7. Talks concerning tourist tax (central government/municipalities) and cultural sector

The Dutch government is entering into talks with the Association of Dutch Municipalities (Vereniging Nederlandse Gemeenten, VNG) to discuss the possibility of waiving provisional and final local tax assessments for businesses and cancelling tax assessments that have been imposed. This applies in particular to tourist tax. Central government is also holding discussions with the cultural sector to ensure it can benefit from generic measures and any sector-specific measures that are necessary.

8. Compensation scheme for affected sectors

The health-related measures taken by the government will have huge consequences for the income of businesses in several sectors in particular. For example, eating and drinking establishments are affected by compulsory closures, and the travel industry will be hit hard by cancellations. Moreover, it will be difficult for them to make up for the drop in income once the coronavirus crisis has passed. The Dutch government is therefore introducing a compensation scheme with appropriate measures for businesses active in the aforementioned sectors. This scheme is being finalised and will be submitted to the European Commission very soon to assess whether it constitutes permissible state aid.

Knowledge dossier on our website

Do you want to know what possibilities are available to you for gearing your business processes to the measures taken so far in connection with coronavirus, or what you can do to help your business stay afloat? We have created a special page on our website, where our coronavirus team of specialists will share their knowledge with you in the coming months. Keep a close eye on that page so that you can make the right choices for your organisation. If you have specific questions about the impact on your organisation, please get in touch with your contact person at Moore DRV or complete the contact form below.