Relevant Measures Addressing Potential COVID-19 Challenges
The Dutch government has implemented a host of different measures to contain and control the spread of the coronavirus (COVID-19), these measures pose new and often profound challenges for individuals and organizations alike. Foreseeable challenges include a decrease in purchases by consumers, suppliers who will be unable or unwilling to deliver or employees who are grounded in a high risk area. You may additionally experience inventory shortages due to the restriction of deliveries from China.
Extended and revised measures
In order to minimize the economic impact of COVID-19, the Dutch Ministry of Economic Affairs and Climate Policy has extended and revised existing measures to help businesses who have been affected by COVID-19. These include:
- Employment Bridging Emergency Fund (NOW-scheme)
NOW is a new temporary measure which is tailored to the needs of businesses who are in need of financial help in order to continue to pay their employees’ wages. NOW’s predecessor, the unemployment benefit during short-time working scheme has been withdrawn. Businesses who applied to the previous short-time working scheme will be informed that their application has automatically been converted to a NOW application. For more detailed information on the NOW-scheme and how Briddge can assist, please ask for our Memo Employment Bridging Emergency Fund.
- SME credit guarantee (BMKB) scheme
If your business in the Netherlands employs fewer than 250 employees you qualify as a SME. As such, you may be eligible to receive a loan through the SME credit guarantee scheme (BMKB). The BMKB was an existing measure which has been extended to minimize the economic consequences of COVID-19. The revised BMKM scheme allows businesses to obtain a bridge loan, or to increase the overdraft limit on their current account. The guarantee runs to 75% of the credit given by the financing party. In order to be deemed eligible for the BMKB scheme, the following conditions must be met:
- Your business is established in the Netherlands, Bonaire, Saba or St. Eustatius;
- Your business has up to 250 FTE employees;
- Your business has an annual revenue of up to €50 million or has a balance sheet total of up to €43 million and;
- Your company has been established for over 3 years.
- Credit Guarantee Scheme for Agriculture (BL-C)
The BL-C scheme is the extended version of its predecessor, the BL Scheme, which serves to assist healthy farms which affected by the corona crisis. This BL-C Scheme can be used for a bridge loan of a maximum of €1.2 million. In order to be deemed eligible for the BL-C Scheme the following requirements must be met:
- You have an agricultural enterprise (for example in agriculture, livestock or horticulture);
- Your turnover is mainly from plant product or livestock (primary production);
- Your company is located in the Netherlands, your business activities mainly take place in the Netherlands.
- Business Loan Guarantee Scheme (GO)
The Business Loan Guarantee Scheme has been extended, making it significantly easier for large and medium-sized companies in the Netherlands to borrow large sums of money. GO allows capital providers to receive a 50% guarantee from the government. The maximum term of GO is 8 years. In order to be eligible for the GO scheme, the following conditions must be met:
- Your company has a registered office in the Netherlands. The commercial activities are conducted primarily in the Netherlands;
- You have a healthy company;
- Your business has reasonable profitability and continuity prospects;
- The financing qualifies as ‘Fresh Money’;
- In the last 12 months, no excessive capital withdrawals from your company have taken place;
- You are only requesting GO financing for your own company activities.
- Temporary bridging measure for self-employed professionals (Tozo)
The Temporary bridging measure for self-employed professionals (Tozo) serves as support for self-employed professionals such as sole proprietor, zzp’ers, partner in a general partnership, owner of a private limited company (DGA), who are facing financial difficulties as a result of the coronavirus. The scheme offers two types of support:
- Income support: depending on your income and your household situation this can amount to a maximum of €1,500 (net). You do not have to repay, there is no capital or partner test. And/or
- A loan for business capital: to a maximum amount of €10,157. You do have to repay this loan, but it is possible to request a delay of your payment obligation.
You will receive income support for a maximum of three months within 4 weeks. If there is excessive rush on the scheme, and the process takes longer, the municipality can give you an advance. The following requirements must be met:
- Due to the coronavirus your income had fallen below the social minimum and/or you have liquidity issues for which you need a business loan;
- You are an established self-employed professional, ages between 18 and (state) pension age;
- You live and reside in the Netherlands legitimately;
- Your nationality is Dutch of equaled;
- Your practice your business and profession in the Netherlands;
- You meet the legal requirements for a business owner, for instance you are registered in the Commercial Register;
- You have all the permits required for your profession or business;
- Your business is still active unless activity has been ceased due to the corona crisis;
- You started your company prior to March 17, 2020 at 18:45pm and you meet the hours criterion: a minimum of 1,225 hours per year are put into your company or professional activities. If your started your business less than a year ago a minimum average of 23.5 hours per week applied;
- Owners of private limited companies (DGA) must hold at least 50% of shares;
- There are no grounds for exclusion from the Participation Act;
- You live in the municipality where you apply
In view of the evolving developments in the spread of the corona virus, the Dutch government has implemented the following tax measures:
- Deferral of payment of Personal Income Tax, Corporate Income Tax, VAT and wage tax;
- The Dutch Tax Authorities will reverse or waive fines imposed as a result of non- or late payment;
- Businesses affected by the corona crisis may request the Dutch Tax authorities to issue them a lower provisional assessment;
- A temporary reduction of the interest rates for late payment of taxes (invorderingsrente) will be effective as per March 23rd, 2020.
- A temporary reduction of the tax on interest (belastingrente) will be effective as per June 1st, 2020. Please note that the tax on interest for Personal Income Tax will be lowered as per July 1st, 2020.
For more detailed information, please see our memo on Dutch Tax Implications COVID-19.
Short-term parental leave due to school closure and payment of wages
In the Netherlands schools have been closed. Under the current circumstances it may take some time for employees to arrange for care for their children. Employees may be entitled to emergency and other short-term care leave. COVID-19 is considered an unforeseen circumstance which may require an immediate break from work. The employee is generally only entitled to a few days at the most. Should the employee require more days, he/she may be able to take vacation days or unpaid leave after consultation with the employer. Please note that during an emergency and short-term care leave, the employer is required to continue to pay the employee’s wages in accordance with the applicable rules of the company.
Dismissal of employees
Under certain circumstances an employer can terminate an employment agreement if it is able to prove it has reasonable grounds to do so. COVID-19 has already, and will continue to pose financial challenges to employers, who may therefore be able to rely on dismissal based on economic grounds. This has to be established on a case-by-case basis. For more detailed information regarding the requirements surrounding this procedure, please contact our labor law team.
Under the current circumstances an employer may have reasonable ground to terminate an employee’s employment agreement, but prefers to do so through an amicable settlement. This would entail that an employment agreement is terminated through mutual consent. In comparison to a dismissal procedure, reaching an amicable settlement with an employee is often quicker and carries less legal costs. For more detailed information regarding the requirements surrounding this procedure, please contact our labor law team.
A transition payment is mandatory in the Netherlands when employers terminate employment agreements. The sum depends on various factors and must be established on a case-by-case basis. For more detailed information regarding the requirements surrounding this procedure, please contact our labor law team.
Due to the unforeseeable circumstances following the COVID-19 pandemic, businesses may be unable to fulfill their contractual obligations. Depending on the applicable contract, businesses may be able to invoke so-called force majeure clauses which relieve parties from performing the said contractual obligations.
30-day travel ban into the Schengen Area
A temporary 30-day travel ban into the Schengen Area has been announced by the European Council. This ban applies to the following countries: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland.
The 30 day ban may be extended if the European Council deems this to be necessary.
Exceptions to the travel ban include:
- EU nationals (incl. UK nationals)
- Family members of EU nationals
- Residence permit holders
- Cross-border and health care workers
If an inbound employee has had their MVV appointment and an MVV visa has been placed in his/her passport, the employee may in principle enter the country which has issued the MVV visa. They may be subject to review by the national authorities and customs.
It is advisable to have employees who are entering the Schengen Area with an MVV visa to travel directly to the country who has issued the visa and avoid layovers.
Due to the high degree of uncertainty it is important to understand the likely travel and entry delays involved and manage your expectations accordingly.
Appointments with the Dutch Immigration Authorities
Note that most appointments with the Dutch Immigration Authorities have been cancelled until April 28, 2020. For more information on how this effects your foreign employees, contact our immigration team.
Appointment at consulates and embassies for inbound employees
Dutch consulates and embassies have modified the services which they are providing until April 28, 2020. This period may be extended. These measures may affect those who have appointments during this period in order to go through the required formalities abroad prior to their relocation to the Netherlands. Consulates and Embassies will reach out if appointments have been temporarily postponed.
Companies who hold the status of recognized sponsor with the Dutch Immigration Authorities must be mindful of their obligations in a time where changes are taking place relating to the company as well as its employees. It is likely that changes taking place (e.g. changes in salary) must be reported to the Dutch Immigration Authorities. For more information regarding which changes require a notification and assistance with the required notifications, please contact our immigration team.
If you have any questions or would like to receive more information, please feel free to email your contactperson within Briddge or contact our office at +31 (0) 85 0187471 and email@example.com.