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Netherlands: Tax relief measures for businesses, response to coronavirus (COVID-19)

Netherlands: Tax relief measures for businesses

The Dutch government in a 12 March 2020 release announced a number of tax relief measures to support the business community in response to the coronavirus (COVID-19).

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These tax relief measures include:

  • Tax payment deferral—the tax administration is to grant deferred payments of  individual income tax, value added tax (VAT), turnover tax, income tax, tax on wages and corporation tax if the entrepreneur provides a written statement reporting the challenges and issues that it has encountered due to the coronavirus crisis. As soon as the request is received by the tax authorities, the tax authorities are to stop the collection, with an assessment to take place later.
  • No default penalty—the tax administration will not impose or will reverse a default penalty assessment that has been imposed for non-payment of tax or late payment of tax.
  • Decrease provisional assessment—if a provisional assessment has been imposed during the financial year, and it appears that the taxable profit will be lower than the profit estimated for the provisional assessment, a reduction of the provisional assessment can be requested (thus improving cash-flow since less tax will have to be paid immediately). The government has indicated that any requests for reduction in connection with the coronavirus will be granted by the tax authorities.
  • Reclaiming value added tax (VAT)—if the taxpayer’s customers are not able to pay their debts due to the coronavirus, then VAT paid in this regard can be reclaimed under certain conditions.

Other relief measures concern reduced working hours for employees, assistance for independent contractors (freelance workers), and broadened guarantees for loans made to small and medium-size entities (SMEs).

If a business expects to realize a loss for the (financial) year 2020, whether or not due to the coronavirus crisis, it may be useful to report this immediately after the end of the financial year and to request a provisional settlement of that loss with the (determined at assessment) 2019 profit (provisional carry-back). Then, 80% of the reported loss is taken into account. The amount of tax payable or paid for the 2019 financial year can then be reduced or recovered, in whole or in part.
 

Read a March 2020 report (Dutch) or (English) prepared by the KPMG member firm in the Netherlands

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