Tax: Relief measures in the Netherlands
On 12 and 17 March 2020, the Dutch government announced a series of temporary tax measures to provide relief to Dutch taxpayers suffering from the detrimental effects of the COVID-19 crisis. In general, the measures are immediately effective for a period of three months, with the possibility of an extension provided certain conditions are met.
Tax payment extension
- Qualifying taxpayers carrying on a business are eligible to request an extraordinary payment extension for certain taxes, e.g. personal income tax, corporate tax, value added tax (VAT) and payroll tax, for a period of three months.
- As of 2 April 2020, a payment extension can also be requested for several other types of taxes and duties, including excise tax, the landlord levy, environmental taxes (see ‘Other measures’ below), insurance premium tax and the betting and lottery tax. Dividend withholding tax is expressly excluded.
- Upon receipt of the taxpayer's request for a payment extension, the tax authorities will immediately halt collection measures for the taxes concerned.
- Contrary to the Dutch government's announcement of 17 March 2020, the State Secretary for Finance stated in a letter of 19 March 2020 that taxpayers requesting the extraordinary three-month payment extension would not be required to provide a third-party statement substantiating their need for the extension.
- For personal income tax, corporate tax, VAT and payroll tax, a single application for the extension covers all current and upcoming tax payments (an application can be filed if a taxpayer has received at least one assessment for these taxes). For other types of taxes, a separate application should be filed.
- For all taxes, the three-month payment extension starts to run on the date on which the (first) application is submitted. The extension is not prolonged by the submission of additional applications or the issuance of subsequent tax assessments.
- Taxpayers can apply for an additional extension on top of the initial three-month period, but only if they are able to adequately substantiate their request (and, if the total tax due exceeds EUR 20,000, a third-party statement is required).
- For the time being, the Dutch tax authorities will not impose any penalties for the late payment of taxes, and any penalties already established need not be paid.
- Applications for the extraordinary tax payment extension may be filed online or sent to the address found here, no later than 1 October 2020.
Accelerated set-off of losses
- On 24 April 2020, the State Secretary for Finance announced that corporate taxpayers are allowed to set off this year, on an expedited basis, their expected 2020 losses deriving from the COVID-19 crisis against their 2019 profits.
- This will result in taxpayers receiving a refund much more quickly compared to the standard procedure. Normally, refunds should not be paid until the 2020 tax return has been filed and corresponding assessment issued by the tax authorities.
- Losses incurred in relation to the COVID-19 crisis in 2020, determined to the best of the taxpayer's ability, can be set off by including a "coronavirus provision" on the taxpayer's 2019 corporate income tax return. It should be noted, however, that the amount of the provision cannot exceed the taxpayer's 2019 taxable profit or the expected full-year loss for 2020 (hence no coronavirus provision can be applied if, overall, a taxable profit is expected for 2020).
- The coronavirus provision must be added to the taxpayer's taxable profit in tax year 2020.
- Taxpayers that have already filed their 2019 corporate income tax return are allowed to submit a revised return including the coronavirus provision.
Notice of inability to pay
- On 8 April 2020, the tax authorities announced that taxpayers requesting the extraordinary payment extension are not obliged to file a separate form containing an explanation as to why they are unable to pay VAT and pay-roll taxes, i.e. a notice of inability to pay (melding betalingsonmacht), pursuant to Article 36 of the Tax Collection Act 1990 (Invorderingswet 1990).
- Instead, the request for a payment extension will be processed as a notice of inability to pay.
- Taxpayers applying for the extraordinary payment extension should therefore consider whether this could have undesired effects, e.g. triggering an event of default under financing agreements.
Revision of preliminary assessments
- Preliminary personal income tax and corporate tax assessments for 2020 may, at the taxpayer's request, be reduced if lower profits are expected due to the COVID-19 crisis.
- For personal income tax assessments, the application must be filed via the online platform Mijn Belastingdienst.
- Corporate taxpayers may file an application (i) via the online platform Mijn Belastingdienst Zakelijk, (ii) with the software used to file their tax returns or (iii) using the special form found here, if options (i) and (ii) are not available.
Lowering of interest rates
- The interest rate on unpaid taxes (belastingrente), which currently amounts to 8% for corporate tax and 4% for other taxes, will be lowered to 0.01%.
- The temporarily lower interest rate will be effective as of 1 June 2020 for all taxes except personal income tax, for which it will be effective one month later.
- In addition, the recovery interest rate (invorderingsrente) will be temporarily reduced from 4% to 0.01% for all taxes as of 23 March 2020.
- Taxpayers applying for tax-neutral treatment with retroactive effect of the conversion of a sole proprietorship into a limited-liability company or vice versa (geruisloze omzetting of terugkeer), a statutory merger (juridische fusie), demerger (splitsing) or company merger (bedrijfsfusie) are granted an additional three month period to meet certain conditions.
- A request for a payment extension for tourist tax can be filed with the municipality where the short-stay accommodation is located.
- Energy suppliers may in certain cases choose to grant a payment extension for energy tax and the renewable energy surcharge due by business customers for April, May and June to October 2020.
- Other temporary measures have been introduced relating to the hours requirement (urencriterium) for individuals carrying on a business, the expense allowance scheme (werkkostenregeling), the customary salary rules (gebruikelijkloonregeling) and other payroll tax matters, private motor vehicle and motorcycle tax, value added tax (VAT) in the healthcare sector, and Dutch individuals receiving specific benefits in relation to German employment (all of which are covered in the updated policy decree issued by the State Secretary for Finance on 6 May 2020).
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