The second support package intended to help entrepreneurs deal with the coronavirus crisis was announced by the Dutch Government on Wednesday, 20 May. This largely extends the measures for a further three months (from June to August). What changes will the new package introduce?
There will now be more compensation available for fixed costs, the redundancy penalty under the Temporary Emergency Bridging Fund for Employment (NOW scheme) will be removed and seasonal businesses will be offered a helping hand. In addition, a partner test will be introduced under the Temporary Bridging Scheme for Independent Entrepreneurs (Tozo).
1. NOW scheme: redundancy penalty removed
The contribution towards payroll costs that can be obtained under the NOW scheme will continue to apply from June to August for companies that suffer a drop in turnover of at least 20%. One important expansion being introduced via NOW 2.0 is that entrepreneurs will now receive a mark-up of 40% instead of the current 30% on their payroll costs.
Redundancy penalty removed
Under the new scheme it is permitted to make employees redundant for commercial reasons without incurring a 50% penalty on the contribution received. Compensation for seasonal businesses also forms part of the new scheme.
Please note: To qualify for the new NOW, companies are prohibited from distributing dividends, paying bonuses to their management and board or buying back their own shares this year.
2. Reimbursement of Fixed Costs for SMEs (in Dutch: Tegemoetkoming Vaste Lasten MKB (TVL)): higher compensation for fixed costs
To date, under the Contribution for Entrepreneurs in Sectors Affected by COVID-19 scheme (TOGS) it has been possible for companies to obtain fixed compensation of € 4,000 for fixed costs. Under a new scheme compensation for fixed costs will now be available up to a maximum level of € 20,000 for the period from June to August. This applies if a company has suffered a drop in turnover of at least 30%.
Please note: The amount of compensation that an entrepreneur can receive on balance depends on the size of the company, the level of its fixed costs and the drop in turnover suffered.
3. Tozo scheme extended: partner test introduced
The Temporary Bridging Scheme for Independent Entrepreneurs (Tozo) is also being extended. Under this scheme independent entrepreneurs who are experiencing financial difficulties can apply for additional assistance to supplement their income up to the level of the minimum social income. The new Tozo will, however, include a partner test. To date, any income of a partner has not been counted when determining the level of the contribution, but this will now be taken into account under the new scheme.
4. Deferment of tax payments: extended until 1 September
The period during which affected entrepreneurs can apply for a deferment of tax payments has been extended until 1 September 2020. Any default penalties for late payment do not have to be paid. The rates of tax interest and late payment interest have been reduced to 0.01% until 1 October 2020 for all types of tax.
In addition, the other tax measures introduced, namely the relaxation of the hour criterion for self-employed persons, the mortgage payment holiday, the VAT exemption for medical aids and the VAT exemption for the loaning out of healthcare personnel, are being extended until 1 September 2020.
Entrepreneurs will be immediately granted a three-month deferment of payments on submission of their first application. An application only needs to be submitted once for this three-month period.
Please note: Entrepreneurs who apply for a deferment of more than three months may not pay out any dividends or bonuses or buy back their own shares.
A deferment granted for more than three months will last until the deferment is withdrawn, which will not be before 1 September 2020. Upon expiry of the deferment entrepreneurs will be offered an appropriate payment arrangement. What this payment arrangement will involve is not yet clear.
5. Continued flexibility in the area of lending (BMKB, GO, KKC, COL)
The additional, expanded or more accessible loans and guarantees that were available to small and medium-sized enterprises, start-ups and scale-ups under the first emergency package will continue. This relates to the coronavirus modules of the government-guaranteed scheme for loans to SMEs (BMKB) and Corporate Finance Guarantee Scheme (GO), the new Small Loans Coronavirus Guarantee Scheme (KKC) and the increased budget for the SEED Capital scheme.
The Coronavirus Bridging Loan (COL), which helps to improve the liquidity position of innovative companies (start-ups and scale-ups), will be allocated an additional € 150 million over the next three months due to the large number of applications received.