The Tax and Customs Administration has implemented the announced form for the application to extend the special deferral of payment, published on its website. Unfortunately, this scheme – which is important to many business owners – once again lacks clarity.
Special deferral of payment
Due to the coronavirus crisis, the rules governing deferrals of tax payments for businesses have been significantly relaxed. We discuss this, amongst other things, in our article Special payment deferral: an update. The deferral is granted for three months following an application. This special deferral of payment takes the form of a suspension of all enforcement measures. As a result, the request only needs to be made once and subsequently applies to the majority of the taxes payable by that business. For deferral of payment of customs duties and pension contributions, a separate application must be submitted to the relevant authorities.
After 3 months
For business owners who applied for a special deferral of payment almost immediately after the start of the coronavirus crisis, the three-month period is now coming to an end. An extension is possible, and the best way to apply for this is using the form that has now been made available. The form can be accessed via DigiD.
Two categories are distinguished for the extension of the special deferral of payment. At the time of the application for a special deferral of payment (We previously wrote that the date on which the application for an extension of the special deferral of payment is made is decisive in this regard, but the explanatory notes on the Tax and Customs Administration’s website show that this is incorrect) the total amount of outstanding tax liabilities was:
- less than €20,000;
- €20,000 or more.
If the total outstanding tax liabilities amount to less than €20,000, the application is relatively straightforward. The form must set out the circumstances and consequences by which the business has been affected by the coronavirus crisis (for example, figures can be provided to demonstrate that turnover or orders/bookings have fallen). A declaration must also be made that the business owner is doing everything possible to maintain or strengthen the company’s liquidity position. This means that, in 2020, the company will not buy back shares, pay out dividends or pay bonuses to the board and management.
If tax arrears amount to more than €20,000, the Tax and Customs Administration requires further information. In such cases, a statement from an independent expert must also be submitted. This could be, for example, an accountant, tax adviser, external consultant, external financier or trade association. This statement must include a liquidity forecast, drawn up on the basis of the facts and circumstances known at the time of the application.
Written request
It is also possible to opt not to use the online form and to submit a written request (by letter) for an extension of the special deferral of payment. Naturally, all the conditions mentioned above must be met. However, it does take the Tax and Customs Administration a little longer to process these written requests.
No extension
Business owners who do not apply for an extension to the payment deferral must, of course, pay their tax debts. This applies to the debts covered by the special deferral, but also, naturally, to any new tax debts. It is (unfortunately) not clear at present what the Tax and Customs Administration’s policy is regarding the arrangement of payment plans.
Fines for non-payment
PLEASE NOTE: once any special deferral of payment has expired, late payment penalties will, in principle, no longer be waived. It is therefore important to ensure that the amounts due on new payroll and VAT returns are paid on time in all cases.