Deferment of tax payments to reduce
burden on businesses

Your business may suffer a drop in revenue and profits due to the coronavirus outbreak, but will still have costs. This may lead to liquidity problems. In view of this, the Dutch government has relaxed the rules for obtaining a special deferment of payment for taxes. A special deferment can be requested for income tax, payroll tax, corporate income tax and VAT. This article explains how deferment works.

When can you apply for deferment of payment?

Deferment of payment cannot be applied for until income tax, payroll tax, corporate income tax and VAT assessments have been imposed. Furthermore, a distinction is made between income tax and corporate income tax on the one hand, and payroll tax and VAT on the other.

Income tax and corporate income tax

In the case of income tax and corporate income tax, you may apply for deferment as soon as the Dutch Tax and Customs Administration has imposed a final assessment that states you have to pay a sum. It is not possible to apply for deferment for a provisional assessment for, say, 2020. We can, however, arrange for the amount of a provisional assessment to be reduced so that you do not need to pay the provisional assessment at this time.

Payroll tax and VAT

In the case of payroll tax and VAT, you are to make the payments indicated in your tax return. You will not receive an assessment for this at first. If you do not pay the tax due according to your return, however, you will receive a supplementary tax assessment (including a fine for non-payment) from the Dutch Tax and Customs Administration. You can then apply for deferment of payment for this tax assessment. It is vital that you submit the tax return on time.

Example
If, for instance, you are not able to pay the payroll tax relating to February 2020, which you must pay by 31 March 2020, you will receive the supplementary tax assessment in April 2020, and can apply for deferment of payment for this tax assessment.

Reporting inability to pay

Besides applying for deferment of payment, as the director of the business you also need to think about reporting any inability to pay in order to avoid being held liable. You can find out more by reading this article on inability to pay.

Applying for deferment of payment

What steps do you need to take (either on your own or with us) in order to apply for deferment of payment:

1. Determine, in conjunction with your tax adviser and accountant, whether you are able to obtain deferment of payment and when you will submit your request. Note: This cannot be done until an assessment has been imposed. It is not possible to apply for deferment before a payment obligation arises.
2. Draft a letter for the Dutch Tax and Customs Administration in which you state the payment cannot be made. The letter must specify that you have payment problems due to the coronavirus outbreak.
3. Arrange for a statement to be issued by a third-party expert, such as your accountant. This statement must be submitted no more than four weeks after your letter was sent to the Dutch Tax and Customs Administration. At the moment, it is not clear what information needs to be included in this statement.
4. If you no longer in a position to pay payroll tax and VAT, you must report your inability to pay. This must be received by the Dutch Tax and Customs Administration no more than two weeks after the payment deadline. With regard to the payment of pension contributions, you also need to report any inability to pay pension contributions to the pension fund.

Note: The payment deadline for the payroll tax return for the month of February is 31 March. This means that any inability to pay must be reported before 14 April.

Action to be taken after following the steps

Once the Dutch Tax and Customs Administration has received your letter containing your request for special deferment of payment, it will stop its collection measures.

If you fail to pay VAT or payroll tax on time, you will not have to pay a fine. Normally, interest is payable to the Dutch Tax and Customs Administration if tax is not paid on time. These rules are also being changed. Interest on overdue and unpaid tax will be temporarily lowered from 4% to 0.01%.

Note: any deferment of payment applies for a specific type of tax and to a specific taxpayer. This therefore means that if deferment is required for a group of taxpayers, it is necessary to apply for deferment, and report the inability to pay, separately for each tax payer. You are able to submit a single request in which you apply for deferment of payment for more than one assessment, but once again this is only possible once you have received the relevant assessments.

What can Moore DRV do for you?

We can imagine you have a great deal to arrange at this time, and so we are happy to apply for deferment of payment for you. To arrange this, please get in touch with your contact person at Moore DRV or complete the contact form below.

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.