The Dutch government today decided to take exceptional economic measures due to the coronavirus. The objective is to protect not only our health but also our jobs and income, and to provide for the consequences for self-employed persons, SMEs and large enterprises. These measures offer billions of euros of support on a monthly basis, for as long as necessary. The measures will allow companies to continue to pay their employees, offer self-employed persons a financial bridge and make it possible by means of alleviated tax regulations, compensation and extra credit facilities to remain in the black.
The Ministers and State Secretaries of Economic Affairs and Climate (EZK), Finance, and Social Affairs and Employment (SFW) presented the measures to the Lower House on Tuesday, in addition to the economic measures that the government already took on Thursday, 12 March.
The spokespersons jointly stated: “First, it is essential that all Dutch citizens always follow the health measures and advice. At the same time, those measures will have a major impact on businesses, large to small, in all sectors. We will not be abandoning them. These new measures will provide them with extra support. The government will also be simplifying access and relaxing conditions, so that employees and self-employed persons can continue to work insofar as possible."
The government is closely monitoring the situation and is in constant contact with employers’ organisations, the social partners and banks. Healthy government finances and budget agreements will ensure that the government is not immediately required to cut costs due to this range of measures. It has opted to allow the national debt to increase, which is possible, because the debt was reduced in better days.
The measures are the following:
1. Introduction of a temporary contribution to wage costs (Ministry of SZW)
A business owner that expects loss of turnover (at least 20%) may apply for a contribution to the wage costs at the UWV (Employee Insurance Agency) for a period of three months (a maximum of 90% of the payroll total, depending on the loss of turnover). The UWV will pay an advance of 80% of the contribution requested. That will make it possible for companies to continue to pay their employees. This is subject to the condition that no employees may be dismissed for economic reasons during the subsidy period. This NOW (Temporary Emergency Bridging Measure for Preservation of Employment) will be made available as soon as possible and replaces the current short-time working scheme. Applications for that scheme can no longer be filed with SZW with immediate effect. Applications that have already been filed but have not yet been handled will be handled as part of the new scheme. Business owners may apply for the contribution for a decline in sales since 1 March.
2. Extra support for self-employed persons (Ministry of SZW and municipalities)
The government has introduced a temporary, relaxed scheme to support business owners, including self-employed persons, to enable them to continue their businesses. The scheme is administrated by the municipalities. Business owners are eligible for additional cost of living support for a period of three months, via an accelerated procedure. That support supplements the income up to the social minimum and need not be repaid. No means test or partner income test applies to this temporary scheme for business owners. Support on the basis of this temporary scheme is also possible in the form of a loan for business capital, at a reduced interest rate.
3. Relaxation of payment of taxes and reduction of tax penalties (Tax Administration)
Affected business owners can more easily request postponement of tax payment. The Tax Administration then immediately suspends the collection of taxes. This applies to income tax, corporation tax, wage tax and turnover tax (VAT). Default penalties, if any, for late payment, need not be paid. It is furthermore unnecessary to immediately submit evidence. The business owners will have a longer period in which to do so. The late payment interest that usually commences at the end of a payment period will temporarily be reduced from 4% to almost 0%. This applies to all tax debts. The tax interest rate will furthermore temporarily be reduced to almost 0%. That reduction will apply to all taxes that are subject to tax interest. The government will change the tax interest rate as soon as possible
4. Broadening of the Business Financing Guarantee scheme (Ministry of EZK)
Businesses that are faced with problems in obtaining bank loans and bank guarantees are eligible for the Business Financing Guarantee scheme (GO). The government has proposed raising the guarantee ceiling of the GO from €400 million to €1.5 billion. By means of the GO, the Ministry of EZK will be helping both SMEs and large enterprises in the form of a 50% guarantee on bank loans and bank guarantees (of at least 1.5 million and no more than €50 million per enterprise). The maximum per enterprise will be temporarily increased to €150 million. The government has undertaken to provide all the guarantee scope required.
5. Interest rate rebate scheme for small businesses on Qredits microcredit (Ministry of EZK)
Microcredit provider Qredits finances and coaches a large group of small businesses and start-ups that often have difficulty obtaining financing via banks, such as businesses in the hospitality industry, retail trade, personal care, construction and business services. Qredits will provide a temporary emergency measure: small businesses that are affected by the corona problems are offered postponement of payment for a period of six months and the interest due during that period will automatically be reduced to 2%. The government will support this measure of Qredits with a maximum of €6 million.
6. Temporary guarantee for agricultural and horticultural businesses (Ministry of Agriculture, Nature and Food Quality)
A temporary guarantee scheme for operating capital will be made available to agricultural and horticultural businesses under the SME Agriculture Credit Guarantee Scheme (BL). The government thereby stands surety for credit for agricultural businesses. The government aims to provide this temporary broadening of the BL as soon as possible.
7. Consultation on tourist tax (State/municipalities) and the culture sector
The government will consult with the VNG (Association of Dutch Municipalities) on the possibility of putting an end to (provisional) local taxes imposed on businesses and withdrawing tax assessments already imposed. This applies in particular to tourist tax. The State is also consulting with the culture sector to link up to generic measures and possible cost allocation if necessary.
8. Compensation scheme for affected sectors (Ministry of EZK)
The government’s health measures will have major consequences for the income in a number of sectors in particular, such as the (obligatory) closing of restaurants and bars, and cancellations in the travel sector. It will furthermore be difficult to recover that income when the coronavirus is in the past. The government has therefore introduced a compensation scheme with appropriate measures for businesses in these sectors. That scheme is currently being elaborated and will be urgently presented to the European Commission for assessment of (permitted) state aid.
Who can businesses turn to?
Banks may file applications for the broadened credit schemes (BMKB and GO) with the Rijksdienst voor Ondernemend Nederland (Netherlands Enterprise Agency), the administration agency of the Ministry of Economic Affairs and Climate. Business owners may contact their credit provider for that purpose. With regard to tax measures, business owners may contact the Business Tax Administration at Belastingdienst.nl/coronavirus. The schemes of the Ministry of Social Affairs and Employment will be made available as soon as possible.
Businesses that have any other questions regarding the coronavirus may turn to Rijksoverheid.nl/coronavirus or the RIVM. Or they can check the website of the Chamber of Commerce. If the answer to their questions cannot be found there, they can phone the Advisory Team at 0800 - 2117.
