The outgoing Cabinet has, in a Chamber letter outlined the expansion of the support and recovery package – which had already been announced at the end of last year – as part of the efforts to tackle the economic consequences of the coronavirus crisis.
Below, we briefly outline some of the key points from this comprehensive package. We will, of course, update our information on the various schemes as soon as possible.
Deferred payment
The special payment deferral has been extended until 1 July 2021. This means that:
- business owners who have not yet applied for an extension to the payment deferral may do so until 1 July 2021 (PLEASE NOTE: this is necessary if you wish to make use of the payment scheme);
- For business owners who have already been granted an extension to their payment deferral, this deferral will be automatically extended until 1 July 2021.
The payment arrangement has been extended to 1 October 2021. From that date, any new tax liabilities must be paid. The accumulated tax liability must then be repaid in a maximum of 36 equal monthly instalments.
Applications from business owners to restructure their tax debts will be considered favourably by the Tax and Customs Administration as part of the time-out arrangement (TOA). This means, amongst other things, that in cases of doubt, the request will be granted and that the Tax and Customs Administration will take into account positive assessments by third parties regarding the viability of the business.
Fiscal measures
Various tax measures are being extended:
- Deferring administrative obligations around payroll taxes;
- the agreement with Germany and Belgium on cross-border workers;
- the exemption for a number of German net benefits;
- the zero-rate VAT on face masks, the secondment of healthcare staff, and COVID-19 vaccines and test kits;
- the rules governing the deduction of mortgage interest when a payment holiday is agreed.
Approval regarding the usual wage The scheme for directors and major shareholders will continue, with two changes compared with 2020:
- turnover for the whole of 2021 is compared with that for the whole of 2019;
- In 2021, the scheme is open to companies with a loss of turnover of 30% or more.
For the hourly criterion During the period from 1 January to 30 June 2021 inclusive, business owners may assume a minimum of 24 hours (16 hours for start-ups in the event of incapacity for work). Entrepreneurs engaged in seasonal work may base their calculation on the hours spent on their business in 2019.
The free space The scope of the work-related expenses scheme will be extended again in 2021 from 1.7% to 3%. This applies to the total wage bill up to €400,000. Above that amount, the discretionary allowance is 1.18%.
Fixed travel allowances may continue until 1 April 2021 (provided that they were agreed by the employer before 13 March 2020).
The Government is still considering further options for reimbursing the costs of working from home.
Fixed Costs Allowance (TVL)
The TVL scheme is being extended to include businesses with more than 250 employees. This applies to the first and second quarters of 2021.
In addition, with effect from the first quarter of 2021, the maximum grant amount will be increased from €90,000 to €330,000. For companies with more than 250 employees, the maximum is €400,000.
The subsidy rates will also be increased to 85%. See also the new table.
The stock subsidy for closed retail businesses is being extended to the first quarter of 2021. This subsidy amounts to a surcharge of 21% on the fixed costs percentage under the TVL. The surcharge is capped at €200,000, which is in addition to the TVL maximum described above.
The application period for the TVL for the fourth quarter of 2020 is still open up to and including 29 January 2021 (5.00 pm). Applications for TVL for the first quarter of 2021 are expected to be accepted from early February 2021.
Starters
A separate scheme will be introduced for entrepreneurs who set up their businesses between 1 January and 30 June 2020, which will be based as far as possible on the TVL. This start-up helpdesk will not be able to open until April or May 2021.
Emergency Measure to Safeguard Employment (NOW)
The NOW payment will be increased from 80% to 85%. Applications for the NOW for the first quarter of 2021 can be submitted from 15 February 2021. The first payment of the advance instalments may be delayed by a few days.