Coronavirus: Cabinet adopts new package of measures for jobs and economy

Note: the date of this news item is March 17, 2020. Read the current information about the Dutch approach and measures against the coronavirus.

The ministers and state secretaries of Economic Affairs and Climate Policy (EZK), Finance, and the Minister of Social Affairs and Employment (SZW) announced the package on Tuesday to the House of Representatives, in addition to economic measures already taken by the cabinet on Thursday, March 12.

The officials jointly state: First and foremost, it is essential that every Dutch citizen continues to follow the health decisions and advice. These measures have a major impact on entrepreneurs from small to large, in all sectors. We do not leave them alone. With this new package, they receive extra support. The cabinet also simplifies access and relaxes conditions so that staff and self-employed persons can retain their jobs as much as possible.

The cabinet closely monitors the situation and maintains contact with business organizations, social partners, and banks. Healthy public finances and budget agreements ensure that the cabinet does not have to cut spending immediately as a result of this package. The choice is made to let the national debt rise, which is possible because the debt was reduced in good times.

The measures:

An entrepreneur expecting a loss of turnover (at least 20%) can apply to the UWV for a wage cost compensation for a period of three months (maximum 90% of the wage sum, depending on the loss of turnover). UWV will provide an advance of 80% of the requested compensation. This allows companies to continue paying their staff. The condition is that no staff may be dismissed for economic reasons during the subsidy period. This Temporary Emergency Bridging Measure for Employment Preservation (NOW) will be opened as soon as possible and replaces the current short-time working scheme. No new applications can be submitted to SZW immediately for the current scheme. Applications already submitted but not yet processed will be handled under the new scheme. Entrepreneurs can apply for compensation for a turnover decline from March 1.

The cabinet introduces a temporary, relaxed scheme to support self-employed entrepreneurs, including freelancers, so they can continue their business. The scheme is executed by municipalities. Self-employed persons can receive additional income support for living expenses for a period of three months via an accelerated procedure. This supplements income up to the social minimum and does not have to be repaid. There is no asset or partner test in this temporary social assistance scheme for self-employed persons. Support under this temporary scheme is also possible in the form of a loan for working capital at a reduced interest rate.

Affected entrepreneurs can more easily apply for tax deferral. The Tax Authorities will immediately stop collection. This applies to income, corporate, wage, and turnover taxes (VAT). Any penalty fines for late payment do not have to be paid. It is also not necessary to immediately provide evidence. The entrepreneur gets more time for this. The collection interest, which normally starts after the payment term expires, is temporarily reduced from 4% to almost 0%. This applies to all tax debts. The tax interest rate will also temporarily be reduced to almost 0%. This reduction will apply to all taxes for which tax interest applies. The cabinet will adjust the tax interest as soon as possible.

Companies experiencing difficulties obtaining bank loans and guarantees can use the Guarantee Entrepreneurs Financing scheme (GO). The cabinet proposes to increase the GO guarantee ceiling from 400 million to 1.5 billion euros. With the GO, EZK helps both SMEs and large companies through a 50% guarantee on bank loans and guarantees (minimum 1.5 million – maximum 50 million euros per company). The maximum per company is temporarily increased to 150 million euros. The cabinet commits to providing all guarantee space needed.

Microcredit provider Qredits finances and coaches a large group of small and starting entrepreneurs who often find it difficult to obtain financing through banks. Think of entrepreneurs in hospitality, retail, personal care, construction, and business services. Qredits opens a temporary crisis measure: small entrepreneurs affected by the corona problem are offered a six-month deferral of repayment and the interest during this period is automatically reduced to 2%. The cabinet supports Qredits for this measure with up to 6 million euros.

For agriculture and horticulture companies, a temporary guarantee for working capital will be introduced under the Guarantee SME Agricultural Credits scheme (BL). The cabinet guarantees the credits of agricultural entrepreneurs. The amended BL scheme will apply from March 18, 2020.

The cabinet will consult with the Association of Dutch Municipalities (VNG) about the possibility to stop (provisional) local assessments to entrepreneurs and to withdraw assessments already imposed on companies. This concerns in particular the tourist tax. The national government is also in consultation with the cultural sector to align with generic measures and possible specialization if needed.

The cabinets health measures have huge consequences for income in certain sectors, especially the mandatory closure of food and drink establishments and cancellations in the travel industry. These incomes are also difficult to recover once the coronavirus is over. Therefore, the cabinet is developing a compensation scheme with appropriate measures for companies in the mentioned sectors. This is now being worked out and urgently submitted to the European Commission for assessment of (permitted) state aid.

Banks can register applications for the expanded credit schemes (BMKB and GO) with the Netherlands Enterprise Agency, the implementing organization of the Ministry of Economic Affairs and Climate Policy. Entrepreneurs register with their credit provider. For tax measures, entrepreneurs can contact the Tax Authorities Business via Belastingdienst.nl/coronavirus. The schemes of the Ministry of Social Affairs and Employment will be opened as soon as possible.

For other questions about the coronavirus, companies can visit Rijksoverheid.nl/coronavirus or the RIVM. Or go to the Chamber of Commerce website. If the answer to your question is not there, call the advice team at 0800 - 2117.