1. Deferral of tax payment
A special deferral of tax payment obligations may be requested for:
- corporate income tax (CIT);
- personal income tax (PIT);
- wage tax; and
- value added tax (VAT).
If the CIT/PIT return has been filed by the taxpayer and the Dutch Tax Authorities (DTA) have issued a tax assessment, the request for the special deferral of tax payment obligations may be filed with the DTA. Regarding wage tax and/or VAT it could be considered to submit the request once the respective tax returns have been filed.
The requirements for this special deferral regime are very simple. It is currently sufficient to state in the request that the Corona-crisis is the reason for payment issues (i.e. no expert statement is required in this period). The DTA will in principle grant the deferral automatically for a maximum period of three months. The deferral may be extended after this period under certain conditions.
2. Reduction of recovery interest rate and tax interest rate to 0.01%
The recovery interest rate will be reduced from 4% to 0.01% on an annual basis. This measure will take effect on 23 March 2020 and will apply to all taxes due.
The tax interest rate will be reduced to 0.01% on an annual basis (currently 8% for CIT and 4% for other taxes). This temporary measure will take effect as of 1 June 2020 for all taxes except for PIT, for which it will take effect as of 1 July 2020.
In addition, penalties for late payment will also not be levied.
3. Reduction of advance tax payments on provisional tax assessments
Taxpayers make advance tax payments on the basis of provisional tax assessments, that are based on an estimated annual profit. Taxpayers that expect a lower profit as a consequence of the Corona-crisis can file a request to reduce such advance tax payment. The DTA will in principle approve such request without further evidence during the period the Corona-crisis measures apply. If a taxpayer has already paid (part of) the provisional assessment and the amount of the new provisional assessment is lower, the difference will be paid to the taxpayer.
4. Temporary compensation for payroll costs
Businesses expecting a significant reduction in turnover (i.e. at least 20%) can apply to the Dutch Employee Insurance Agency for a compensation of salary costs up to a maximum of 90% (depending on the lost turnover) for a period of three months. Based on the application, the Dutch Employee Insurance Agency will make an advance payment of maximum 80% of the compensation. Businesses should continue to pay 100% of the salary to the relevant employees. The most important condition for such reimbursement is that the business cannot dismiss employees during this period for economic reasons.
Please note that there is a large number of other measures (both tax and non-tax related) which may help your business in this difficult period. It should also be noted that already existing tax rules may already offer (additional) opportunities to further improve liquidity. For example, a tax provision may be possible in respect of stock, receivables etc. as a result of the Corona-crisis.
Should you require additional information or should you have questions about the above, we are available to help you to limit the (tax) implications of the Corona-crisis. We will keep you informed of all relevant updates regarding these (and new) tax measures.