Last Friday, the Cabinet announced the third aid package in connection with the corona crisis. This third package contains the following measures.
Extension and adjustment scheme for compensation for wage costs (NOW)
The NOW scheme will be extended by nine months. During this period the NOW will be phased out. A number of changes will be made to the NOW scheme:
- The scheme will run from 1 October 2020 to 1 July 2021 and will consist of three three-month periods. The employer may decide to make use of the NOW for each period separately.
- During the first period (October to December), the scheme applies to all employers with an (expected) turnover loss of 20%. From the second period (January 2021) onwards, this will be increased to an (expected) loss of turnover of 30%.
- The aid over 9 months is subject to a gradual phasing out of the compensation percentage. The maximum reimbursement rate is 80% in the first period, 70% in the second period and 60% in the third period.
- It will be possible for employers to reduce the total wage bill without affecting the level of compensation for wage costs. The percentage that the total wage bill may be reduced without affecting the level of the allowance will be determined by means of an exemption percentage. An exemption percentage of 10% applies for the first period, 15% for the second period and 20% for the third period.
- Under the NOW-2, the allowance was reduced in the event of the dismissal of employees for economic reasons. This reduction of the allowance has been abolished in the new scheme.
- The maximum daily wage to be compensated is reduced in the third period from € 9,538 per month to € 4,769 per month. For the first and second periods, the maximum daily wage to be reimbursed remains € 9,538 per month.
The NOW scheme is currently being worked out in more detail by the Cabinet. We will inform you as soon as more is known about this scheme.
Conditions for extended bridging scheme for self-employed persons (TOZO)
The Tozo regime will be extended from 1 October to 1 July 2021 (Tozo 3). Contrary to the previous arrangements, the extended scheme contains a test of available funds. Entrepreneurs with more than € 46,520 in directly available cash (such as cash, bank and savings balances and shares, etc.) are not eligible for the Tozo 3. The partner income test remains valid for the Tozo 3. The working capital loan will also continue to apply under the new scheme. The maximum amount for the Tozo 1, Tozo 2 and Tozo 3 together will be € 10,157.
The Cabinet feels it is important for entrepreneurs to orient themselves towards their future. As of 1 January 2021, municipalities will support entrepreneurs where necessary.
Compensation of the Fixed Expenses for SMEs (TVL)
The duty-free allowance for fixed expenses will be extended by three times three months until 30 June 2021. The maximum amount per company will be increased to € 90,000 per three months. In order to qualify for the TVL, a company must have a minimum of €4,000 in fixed costs in three months. In the old scheme this was four months. The loss of turnover will be determined by comparing the months to which the application applies with the same months in 2019. The scheme can be applied for every three months. The scheme will be phased out after 1 January 2021. For the second period the required (expected) loss of turnover will be increased from 30% to 40% and for the third period the (expected) loss of turnover will be 45%.
Guarantees, loans and guarantee funds
The additional, extended or more accessible lending and guarantees to SMEs for sufficient liquidity (BMKB-C, GO-C and KKC) will continue to be available after 1 October 2020.
Tax measures
The period for applying for or extending tax deferrals shall end on 1 October 2020. As a result, it will expire on 1 January 2021 at the latest. This means that entrepreneurs will again have to pay taxes on time from 1 January 2021. The reduced collection interest rate of 0.01% will be extended until 31 December 2021. The tax rate for income and corporate income tax will be increased from 0.01% to 4% from 1 October 2020.
There will be a 24-month payment schedule for accrued tax debts from 1 January 2021. The accrued tax debt will have to be repaid in 24 equal monthly instalments. If the period of two years is too short, the Tax and Customs Administration, together with the entrepreneur, will examine whether a tailor-made solution is possible on the basis of existing policy.
