New corona measures
28 april 2020 | Door: Matthijs van Dorssen
Last week the Dutch government announced a few new financial and tax measures. In this article we will give a short explanation of these measures.
Expansion of wage compensation
First of all the NOW measure where up to 90% of the payroll costs is supported, has been expanded. At first it was only possible to qualify if your total group of companies combined suffered a loss in turnover. If you only had one of a few entities that suffered a loss of turnover it could be that you would not qualify for the support measure because the total group turnover did not decrease enough. Now it is also possible to qualify with only one entity that has suffered a loss of turnover. However there a some conditions such as that it is not permitted to pay out any dividends or bonusses. Also this measure is not possible for group structures that have a intra-group secondment operating company. These companies always need to look at the total decrease of turnover on group level.
Already use your expected loss for 2020!
An important new measure is that you can make a reservation of your expected fiscal loss of 2020 in your corporate income tax return 2019. In this way you will not have to pay a large amount of taxes over 2019 that would be refunded in 2021 or later, because the losses of 2020 could be settled with the profit of 2019. The reservation of the expected loss of 2020 can not be higher than the profit of 2019. If your Tax return has already been filed, it is possible to file a new return with the reservation taken into account.
Minimum wage for directors/major shareholders
When you are a director/major shareholder of a Dutch entity, you are obliged to get a minimum wage from your own company. It was already clear that this wage could be lower for 2020 as a result of the corona virus crisis. Now it has become clear that the decrease of your wage can be the same as the decrease of the turnover. One of the restrictions is that you won’t be allowed to get dividends from your company.
Working hours for the self-employed
If you are self-employed you can enjoy several tax benefits when you spent at least 1.225 hours on your company on a yearly base. This is an average of 24 hours a week. For the period from March 1st until May 31st, the Tax Authorities will assume that you have worked a minimum of 24 hours a week for your company. In this way the total hours on a yearly base won’t be effected by the crisis and you will still be able to claim the tax benefits.
Extra room to give your personnel a tax free gift
For the payroll taxes we have the Work-Related Expense Scheme. Under this scheme the taxable element of cost reimbursements, fringe benefits and other personnel related costs is determined. A percentage of your total wages is the tax free amount of the costs and the costs above this percentage are taxed with 80%. As a result of the corona virus crisis the percentage of the tax free amount has been increased. At first 1,7% of the first € 400.000 of wages was tax free and 1,2% of the wage bill above the € 400.000. The first percentage has now been increased to 3%. This means that the first 3% of the total wage bill up to € 400.000 can be used for tax free benefits for your staff. This means that there is extra room to give them a tax free gift in these difficult times.
Mortgage interest deduction
Dutch banks offer deferred repayments on loans and mortgages. When you have a mortgage on your house, the deferment of the repayment can affect the mortgage interest deduction for your personal income taxes. It will now be possible to spread out the repayment of the loan, that has been deferred, over the rest of the mortgage period. This will not affect the interest deduction.
There are a lot of measures for the Corona virus crisis. We can help you find the measures that are applicable in your situation and help you to apply for the measures. Please contact your Alfa advisor for more information. We are always nearby!