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Netherlands: Expansion, simplification of deferral policy for tax debts (COVID-19)

Netherlands: Deferral policy for tax debts (COVID-19)

A special deferral of payment for tax debts for businesses that are encountering financial difficulties due to the coronavirus (COVID-19) pandemic has been expanded.

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The Deputy Minister of Finance, in an April 2020 letter to the Lower House, announced further easing and simplification of the temporary deferral policy for tax debts.


Temporary deferral policy as of 19 March 2020

A March 2020 letter sent to the Lower House had already stated that every business encountering financial difficulties as a result of the COVID-19 crisis is eligible for a deferral of payment for any value added tax (VAT), individual (personal) income tax, payroll tax, and corporate income tax payable. Read TaxNewsFlash

From the date on which the business registers for this deferral, the collection of tax is immediately put on hold for three months. According to the March 2020 letter, additional information is required for deferrals longer than three months.


Expansion, April 2020

The temporary deferral policy will now apply to a larger number of relevant taxes for businesses—i.e., tax on games of chance, insurance premium tax, the landlord levy (verhuurderheffing), environmental taxes (including the energy tax or surcharge for sustainable energy (Opslag Duurzame Energie (ODE)), coal tax, waste tax, tax on tap water), excise duties (mineral oils, alcohol and tobacco), and the consumption tax on non-alcoholic drinks and similar taxes in the Dutch Caribbean. For all these taxes, requests for a deferral of payment will be dealt with, in any case until 19 June 2020, according to the temporary deferral policy.

Measures regarding payment obligations under customs regulations had previously been announced, including granting deferrals of payment upon request. Read TaxNewsFlash

Dividend withholding tax: A tax such as the dividend withholding tax is, on the other hand, excluded from the temporary deferral policy because distributing dividends actually weakens the liquidity position of companies. In the April 2020 letter, the Deputy Minister called on companies to not distribute any dividends for the time being.


Further easing

The Deputy Minister announced that the conditions have been eased for obtaining a deferral of payment for periods longer than three months. The letter does, however, state that in that situation, a substantive assessment remains necessary. The requirement for a statement from an expert third party will not be required if the total tax debt for which a deferral of payment is requested is less than €20,000. In those situations, businesses can suffice with “less comprehensive” information—for example, documents showing that the turnover figures or the orders/reservations have decreased significantly compared to preceding months. Further instructions will be placed on the website of the Dutch tax authorities.

If the total amount for which a deferral of payment is requested exceeds €20,000, a statement from an expert third party, such as an auditor or branch organization, will be required. The further elaboration of this will also be announced shortly.


Simplification of procedure

Since early April 2020, requests for a deferral of payment can also be made on the website of the Dutch tax authorities using a simple online form. This is currently possible for VAT, individual income tax, payroll tax, and corporate income tax.

During the course of this week (beginning 6 April 2020), the form can also be used for other taxes falling under the temporary deferral policy. Written requests for a deferral of payment can also still be submitted.

After the online form or letter has been received, the Dutch tax authorities will immediately put all tax collection measures on hold. One request now suffices for a deferral for all types of outstanding tax debts that fall under the deferral policy.

Businesses will automatically be granted a three-month deferral of payment. The deferral applies to both outstanding debts at the time of the request and any new debts arising in the subsequent three-month deferral period. It is not necessary for taxpayers to keep submitting new requests for a deferral of payment.

According to information on the website of the Dutch tax authorities, these rules apply to all deferral requests submitted since 12 March 2020. For remittance-based taxes such as VAT and payroll tax, the request for a deferral of payment can only be (automatically) granted if a supplementary assessment has been imposed—thus, if a tax return has been filed.

Notification of inability to pay: With regard to the special deferral for periods longer than three months, information on the website of the Dutch tax authorities states that deferral requests submitted by a director of a commercial company (that is a legal entity falls under the corporate income tax regime) that cannot pay the payroll tax and/or VAT, will in principle also be regarded as a notification of inability to pay. The Dutch tax authorities will review this notification and reply to it separately.
 

“G account”

An additional measure has been introduced for businesses with a “G account.” It is now also possible to release these blocked bank accounts, which can normally only be used to pay payroll tax and VAT, up to the amount for which a special deferral of payment is granted. Further instructions for applying for this (additional) release will follow.


Energy tax and surcharge for sustainable energy (Opslag Duurzame Energie—ODE)

The government already announced in March 2020 its intention to temporarily postpone the levying of energy tax and the ODE. The Deputy Minister will publish a policy statement to approve that energy suppliers will be liable for energy tax, ODE, and the VAT on supplies of natural gas and electricity in the months April, May, and June 2020 at a later date than normal.

The approval will generally not apply to supplies of natural gas and electricity to households and small businesses. In short, the approval will concern supplies for which the energy supplier invoices without pre-payments or, if there are pre-payments, the final invoice covers a calendar month. This is based on the energy supplier not charging the relevant customers energy tax, ODE, or VAT on supplies in the months April, May, and June 2020. This means that a deferral of payment for ODE and energy tax will be able to be granted to businesses. In October 2020, the energy tax and ODE, increased by the VAT on these amounts, will be charged by means of an additional invoice and become payable by the energy suppliers.
 

Read an April 2020 report prepared by the KPMG member firm in the Netherlands

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