The Ministry of Finance for the Netherlands has announced that the government will extend its COVID-19 support package for jobs and the economy into the third quarter of 2021. The government noted that while the outlook for economic recovery after the pandemic is positive and the virus appears to be on the decline, there remain many uncertainties for businesses and workers that necessitate further relief.
TVL and NOW
The government plans to continue the Fixed Costs Grant Scheme (TVL) and the Temporary Emergency Scheme for Job Retention (NOW) in the third quarter. The TVL grant ceiling for large companies will be raised to €1.2 million for the second quarter. The new reference month for NOW grants will be February 2021. The scheme's extension and adjustment are expected to cost €2 billion.
TOZO and TONK
The government also intends to continue the Self-employment Income Support and Loan Scheme (TOZO) and the Temporary Support Scheme for Necessary Costs (TONK) in the third quarter of 2021. When future applications are considered, TOZO will focus more on supporting and encouraging businesses so that they can get back on their own feet as quickly as possible. Repayment of TOZO working capital loans has been deferred by six months to 1 January 2022. Until then, no interest will be charged.
Tax Payments
The extension of support includes the ability of businesses to further defer their payment of tax debt incurred as a result of the COVID-19 pandemic. Businesses will now be required to start payments beginning 1 October 2022 and will have five years to do so, instead of the previous repayment period of three years beginning 1 October 2021. However, businesses are expected to begin making normal tax payments again beginning 1 July 2021.
The rate for of interest for late tax payments is also being relaxed. On 1 January 2022, late payment interest is to be set at 1% instead of 4% and will be raised in steps until it returns to 4% on 1 January 2024. Over 250,000 businesses have been granted tax deferrals worth €16 billion. Many businesses have already paid at least part of the amount they owe; a total of €36 billion in deferred tax was outstanding.
Other tax measures taken in response to the pandemic, such as mortgage payment holidays and tax-free travel allowances, are extended until 1 October 2021.
Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association