On 17 March, the Dutch Government announced new measures to help entrepreneurs and companies combat the economic fallout caused by Covid-19. We have made a selection of those measures most likely to be relevant for Chinese businesses in the Netherlands.
Businesses who expect a loss of turnover of at least 20% due to Covid-19 are eligible for a compensation of up to 90% (up from a maximum of 75%) of the wages of employees (depending on the loss of turnover) from the Employee Insurance Agency (UWV) for a period of three months.
The UWV will pay an advance of 80% of the wages so that companies may continue to pay their employees. As a condition, these companies would not be allowed to lay off their staff during this period. This temporary emergency measure will replace the current Work Time Reduction Scheme.
Affected companies will be able to more easily apply for a deferment of taxes. The tax authorities will then stop tax collection immediately. This would apply for (i) income, (ii) corporate and (iii) turnover taxes (VAT). The regular penalties related to late payment of taxes will not be enforced nor is it required to immediately provide evidence to be eligible for tax deferment as the entrepreneur will receive more time than usual to provide aforementioned evidence.
The interest rate for a delayed payment in taxes will be reduced from 4% to almost 0%. This applies to all tax debts. Tax interest will also be adjusted to almost 0%.
Companies that experience issues in obtaining bank loans and bank guarantees can make use of the Guarantee Business Financing scheme (GO). The government plans to increase the guarantee ceiling from 400 million to 1.5 billion euro. Through this measure, the government will help both SME's and large companies by guaranteeing 50% on bank loans and bank guarantees (minimum 1.5 million - maximum 50 million euro per company).
For small entrepreneurs affected by Covid-19, it is possible to apply for financing. This includes entrepreneurs in the sectors catering, retail, personal care, construction and business services. A repayment of six months is offered and the interest during this period is reduced to 2%.
Certain industries have been hit relatively harder by the government measures to control Covid19, such as restaurants and travel industry. The government is there for introducing a compensation scheme with appropriate measures for companies in these sectors. Currently this is under review by the European Commission to assess whether or not it is considered permissible state aid (normally not allowed).
If you need further information please do not hesitate to contact our Asia team: Joost Vrancken Peeters, or Ye Yu.
Director Asia Desk