Earlier today, the Dutch government announced the main features of the new package of the financial aid measures regarding to the consequences of the outbreak of Covid-19. The details of these schemes will be announced at a later date. In this memorandum we highlight the main features of the announced measures. We will inform you as soon as the details of the schemes will be published.
Part of the aid package is the extended Temporary Emergency Bridging Measure for the Preservation of Work (‘NOW-II’). The NOW-II uses the same systematics as the original scheme (”NOW-I”). However, the scheme also contains amendments.
N.B.: The NOW-I works – in short – as follows. An employer who expects at least 20% loss of turnover for three consecutive months (March/April/May, April/May/June or May/June/July) can receive compensation for the wage costs in March, April and May 2020. The UWV will provide an advance payment equal to 80% of the expected compensation, which is based on the figures as set out in de application. The basis for the calculation of the compensation will be the wage costs of January 2020. Afterwards, the actual loss of turnover will be determined. A correction will be made if the loss of turnover is lower or the actual wage bill is lower than the wage bill in January 2020. If the employer has applied for dismissal of employees for economic reasons at the UWV during the period for which the compensation is received, the employer will be fined. Employers can still appeal to the NOW-I until 31 May.
The changes to the NOW-II can be summarised as follows:
- The NOW-II offers a compensation for the wage costs in the months of June, July and August 2020. The reference month for the wage bill will be March 2020.
- The fixed (lump-sum) supplement on the wages will be 40 percent instead of 30 percent.
- In the NOW-II, the fine for applying for dismissal in case of commercial reasons lapsed. However, companies must now declare that they will consult the trade unions, if they wish to apply for a commercial dismissal for more than 20 employees. This obligation already existed under the Collective Redundancy (Notification) Act.
- For 2020, companies may not pay dividends to their shareholders, pay bonuses to the board and management, and may not repurchase their own shares.
- Employers applying for the NOW-II will be obliged to encourage their employees to retrain. When applying for the NOW-II, employers must declare that they are willing to do this.
In addition, regarding to NOW-I, the Dutch government has announced that if the wage bill in the months of March to May is higher than the wage bill in January to March 2020, March 2020 will be the starting point for calculations. In doing so, the government compensates the business which are highly dependent on the seasonal work.
Companies can apply for the NOW-II from 6 July 2020.
Compensation for the fixed charges of small and medium-sized businesses in specific sectors
Under the new aid package, companies in certain (severely affected) sectors that employ 250 or less workers will be eligible for a one time compensation up to € 20,000,- (tax-free). Depending on the size of the company, the level of fixed charges and the degree of loss of turnover (at least 30%), companies will receive compensation up to a maximum of € 20,000 for the next three months. Entrepreneurs whose main or secondary activity is registered and corresponds to one of these SBI codes are eligible for this compensation.
Extension of tax measures
The period during which companies can apply for tax deferrals has been extended till 1 September 2020. Any default penalties do not have to be paid.
Entrepreneurs applying for deferment of tax payments will immediately receive a three-month deferment of all types of tax upon the first application. Entrepreneurs can also apply for a deferment for a period longer than three months. However, if they apply for a deferral for more than three months, they will have to declare that they will not pay dividends and bonuses and will not repurchase their own shares.
Extension scheme for self-employed entrepreneurs (TOZO)
The TOZO scheme, on the basis of which self-employed persons can obtain additional income, will be extended until August 2020. However, the extended scheme will include a partner income test. This partner income test means that only households with an income below the social minimum are entitled to a income allowance.
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