Incentives offered by the Dutch Government to support companies affected by the Corona virus
Due to the Corona virus, the Dutch Government has taken measures to reduce the burden for companies faced with financial difficulties as result of the virus outbreak.
Permit for reduction in working hours
In the Netherlands, it is possible to obtain a permit for temporary, and partial, unemployment benefits for your employees in case of exceptional circumstances. The Dutch Government has classified the Corona outbreak as a special circumstance for this matter. The permit enables companies to temporarily reduce the working hours for its employees, and thus lowering the wage costs. For the working hours reduced, the employer can apply for (temporary) unemployment benefits on behalf of their employees. A permit is granted for a maximum of 6 weeks, and can be extended to a maximum of 24 weeks.
To apply for the permit, a reduction in work of at least 20% as a result of the Corona outbreak has to be expected. This expected reduction in work has to last for at least 2, but no more than 24 weeks. The permit has to be applied for online, and substantiated in detail. Failure to provide sufficient details will lead to a longer processing time. Starting from the moment of applying the permit, the employees involved are then no longer permitted to work more than was indicated in the request. If at any time after the application any of the employees involved work more than what was included in the request, the permit can be revoked with retroactive effect.
If the permit is granted, it has to be reported to the Employee Insurance Agency (“UWV”) within a week. From the moment of filing the permit, the employer will be relieved from paying the employee’s wage for the hours reduced. The employee will receive unemployment benefits for these hours (75% for the first two months and 70% for the period thereafter, with a combined maximum of 24 weeks). As of now it’s unclear whether the employer will have to pre-finance the unemployment benefits, or if it’s allowed to wait for the UWV to provide the funds to the employer. We assume that pending the request, the employee has to pre-finance the unemployment benefits, but once granted such will be reimbursed.
Deferral of tax payment
Companies who find themselves unable to fulfil their payment obligations to the Dutch tax authorities (“DTA”) can ask for a deferral of payment. The request must be substantiated and submitted in writing. If the request is honoured, the DTA will seize all payment recovery measures. Any fines for late payment will be waived as well. Deferral of payment can be requested for Dutch corporate income tax, VAT, payroll withholding tax and social security premiums.
The request for deferral has to be accompanied by a statement from a third party. This third party has to confirm your company has instant financial problems caused by the Corona virus, but will be viable in the long term.
If you need assistance in applying any of the above incentives, please contact your account manager.