Despite the fact that the Netherlands has not been hit as hard by the COVID 19 crisis as its neighboring countries, the Dutch government has taken some very interesting tax and labor measures to minimize the economic impact of the pandemic.
Among the measures taken by the Dutch Government, there are some that we can find in other neighboring countries, such as the postponement of taxes, the reduction of late payment interest or the exemption of penalties for late filing.
In the Dutch case, these measures will not be automatic and in order to carry out a tax deferral, an application must be submitted and the companies must demonstrate that they have experienced problems due to the COVID crisis.
This request for postponement must be made for a maximum period of three months, after three months, a longer deferral of payment may be granted, but in that case a statement from an expert third party must be submitted underlining the need for such a deferral.
Another measure that relieves the taxpayer in these difficult times is that the Government will temporarily reduce the interest rate for late payment of all tax debts owed to 0.01%. Regarding fines and surcharges for non-compliance, the Government reiterated that the Dutch tax authorities will not impose penalties for non-compliance or will revoke those already imposed for late payment of taxes.
But without any doubt, the star measure is in the Labor area, and is about temporary compensation of labor costs, this is the salary plus 30%.
In this sense, employers who expect a loss of turnover of at least 20% can apply to the Dutch Institute for Employee Benefits Schemes (UWV) for compensation for payroll expenses up to a maximum of 90% (depending on the loss of turnover).
In accordance with the request, the UWV will provide an advance payment of 80% of the compensation. Employers will still pay 100% of the wages of the employees concerned. This measure runs for three months; however, the period can be extended for another three months but is also subject to conditions.
Finally, the way in which companies can transfer the losses of the current year to the profit of 2019 is being designed. Normally, the losses of a current fiscal year can only be offset with the profit of the previous year after filing the taxes for the current year.
The Coronavirus crisis is causing businesses to face huge challenges and, in this context, reliable and up-to-date information is essential. At AUXADI, we are experts in providing accounts, tax compliance and international payroll management to our clients. If you would like us to expand on the above information, please do not hesitate in getting in touch with us.