End of support package for jobs and economy
With effect from 1 October, the government will discontinue the generic support measures that have helped the Dutch economy as much as possible through the coronavirus pandemic over the past 18 months. This means that the Emergency Measure for the Preservation of Jobs (NOW), Reimbursement of Fixed Costs (TVL), Temporary Emergency Measure for Self-employed Persons (Tozo), Temporary Support for Essential Costs (TONK) and various tax measures will not be extended beyond that date. The restrictive coronavirus measures have largely been lifted, the economy is up and running again and unemployment is low. Continuing with the support packages would hamper economic recovery. A number of specific support measures will remain in place in the fourth quarter, as will the additional measures aimed at retraining and economic adaptability. The government is working on a scheme for nightlife venues, which are expected to remain closed after 1 October.
The government has great respect for the resilience, creativity and perseverance that companies, business owners, self-employed professionals and workers have shown during this exceptionally difficult period. It has been a tough time in which entire industries came to a standstill and people sometimes lost their jobs or businesses. However, thanks in part to the support packages for jobs and the economy, the number of bankruptcies has been kept to a minimum and unemployment rates are low. The economic figures are encouraging: the Netherlands Bureau for Economic Policy Analysis expects growth of 3.8% in 2021 and 3.2% in 2022. Continuing with the generic measures in the support package would disrupt this recovery. The rising shortage on the labour market is a clear indication of this. The support package will therefore end on 1 October 2021.
The government realises that the situation for certain groups will be difficult in the period ahead. Nightlife venues must still remain closed, and some businesses are facing a different world compared to the beginning of 2020. A number of support schemes will therefore remain in effect in the fourth quarter to promote labour market dynamism and economic adaptability. A total of over €80 billion has been disbursed since the introduction of the support package in March 2020.
Guarantee schemes
The coronavirus funding schemes KKC, Qredits bridging credit, BMKB-C and GO-C will remain in place throughout the rest of the year to continue facilitating market financing. Businesses in need of liquidity can make use of these schemes. The Events Guarantee Fund will also continue in the fourth quarter.
Tax
As previously announced, the possibility of requesting a tax deferral will end on 1 October. Since the beginning of the crisis, 369,000 business owners have taken advantage of this option, amounting to €40.4 billion in deferred taxes. A large part of the tax debt has already been repaid (€16.6 billion) or reduced if, for example, the tax assessment was incorrect (€4.6 billion). There is currently a net balance of €19.2 billion in outstanding tax debt, representing the tax deferrals of 270,000 business owners. Business owners are expected to start paying taxes again as of 1 October 2021. The date for business owners to begin repaying their deferred taxes has already been pushed back to 1 October 2022, with a five-year repayment term. This applies to all debts of business owners who have been granted a deferral of payment due to the pandemic, including debts for which business owners did not request an extension.
A number of other tax measures implemented due to the pandemic will continue until 1 January 2022, such as the untaxed travel allowance and the payment freeze for mortgages. In addition, the Netherlands is consulting with Germany and Belgium to continue the agreements on the taxation of cross-border workers until 1 January 2022.
Nightclubs and discos
As previously announced, the government is working on a targeted compensation scheme for nightclubs and discos if they are still unable to reopen after 1 October. These businesses are in an exceptional situation, because they represent the only sector that remains completely closed under government orders. The implementation of such a targeted scheme is very complex and requires a lot of work from the implementing organisations. The government is therefore taking a careful look at what is technically and legally possible.
Discontinuation of Tozo
From 1 October, business owners who need financial support can once again apply for financial support for self-employed professionals (Bbz scheme). To ensure that municipalities can handle this, the government has decided to simplify the implementation of the scheme until the end of this year. Under these changes, municipalities will not have to carry out means-testing, entrepreneurs can apply for Bbz benefits with retroactive effect of up to two months and the municipality will determine the income and the amount of the Bbz benefit per calendar month (instead of per financial year). From 1 January 2022 onwards, municipalities will once again implement the Bbz scheme without any changes.
Return of Regulation for Reduction in Working Hours
The Regulation for Reduction in Working Hours (WTV) was suspended due to the introduction of the NOW scheme. Once the NOW scheme is discontinued, the WTV will be reintroduced on 1 October. This regulation provides assistance to employers who are affected by exceptional circumstances that fall outside the scope of entrepreneurial risk. The reintroduced WTV is explicitly not intended for coronavirus-related circumstances, but for short-term exceptional circumstances.
Supplementary social package
With the introduction of a supplementary social package, the government has made additional funds available to provide new prospects for people who are facing uncertainty due to the coronavirus pandemic.
As part of this package, municipalities, the Employment Insurance Agency and regional mobility teams will help those in need find a new job, new business activities and an income by offering intensive guidance, career advice and practical training at the secondary vocational education (MBO) level. These efforts will help people receiving social assistance or unemployment benefits, people who are at risk of losing their job due to the organisation’s bankruptcy and self-employed professionals receiving Tozo benefits who are looking for work. Municipalities, schools and regional mobility teams will help young people find work or continue their education. The package also includes help for people who are facing financial problems due to the pandemic.