Outgoing State Secretary Van Rij extended the temporary relaxation of the sanitation policy to 1 April 2024. The temporary scheme now applies to all reorganisation requests filed with the Inland Revenue before 1 April 2024.
Temporary relaxation
He writes that in a Chamber letter in which he briefed the House on the progress of corona tax debt recovery. Under the temporary relaxation of reorganisation policy the Tax Administration takes a sympathetic view of reorganisation requests and temporarily settles for the same distribution percentage as unsecured creditors receive (i.e. with 100% instead of 200%). This will make it more interesting for creditors to cooperate in debt restructuring.
More conditions
The rehabilitation policy involves remission of part of the outstanding tax debts. The Tax Administration only cooperates in this if there is an agreement with all creditors and no reasonable possibility to hold a third party liable. Furthermore, in addition to the 100%-/200% criterion mentioned above, the following conditions are attached to remission (Section 22 Implementation Regulation Invorderingswet 1990):
- the part of the tax debt receivable by the Tax Administration is substantial;
- and is of at least the same size as can be obtained through enforcement measures;
- the Tax Administration is not disadvantaged in benefit rate and rate of payment compared to equally privileged creditors;
- tax obligations that arise during the processing of the waiver request are fulfilled in a timely and complete manner;
- there are real prospects of continuing the business after the establishment of the debt restructuring (where this is not the case, other conditions apply).
Form
The application for remission must be submitted using the application prescribed by the Inland Revenue for this purpose form. To avail of the lenient treatment of the temporary relaxation of the remediation policy, the form must be accompanied by:
- A reasoned statement by or on behalf of the entrepreneur on the occurrence of the financial difficulties;
- a liquidity forecast for the next 24 months showing the expected repayment capacity available (which may take into account necessary investments);
- A positive assessment of the company's viability from a bank, accountant or restructuring expert (failing which, the Inland Revenue will investigate the viability further).