Extension of the cabinet support and recovery package

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Date:
22 Dec 2020

By:
Aimëe Peterse

On 9 December 2020, the Cabinet announced  that it will further extend the job and economic support and recovery package. The Cabinet will simultaneously refrain from planned cuts in the support measures that were due as of January next. These measures are aimed at preventing the loss of jobs, income and business.

This article will provide an overview of the most relevant measures.

NOW

Note: Following the press conference of 14 December last, in which the Cabinet announced a lockdown until 19 January 2021, it was announced that the NOW 3 subsidy window for the first period would be reopened from 15 December to 27 December next for companies with a loss of turnover of more than 20%. So you can still apply for NOW 3 subsidy! For more information on this, continue to read  this.

For our overview regarding the NOW 3.0 we would like to refer to this page. Originally, the maximum rate of reimbursement of the NOW subsidy would fall from 80% to 70% in the second period (from 1 January 2021). However, the Cabinet will not implement this reduction. All parameters of NOW 3 (the reimbursement rate and the turnover thresholds) will therefore be maintained in the second period.

 

NOW 2

NOW 3

 

 

First period

Second period

Timeframe

Juni - September 2020

October - December 2020

January - March 2021

Compensation rate

90%

80%

80%

Total wage bill exemption

-

10%

10%

Minimum loss in turnover

20%

20%

20%

Fixed supplement

40%

40%

40%

Maximum wage compensation

2x daily wage

2x daily wage

2x daily wage

The Cabinet has also reached an agreement with the UWV that 'safety-netters' (employees who do not (or no longer) have an employer) who are unable to work due to quarantine will be entitled to sickness benefit under the Sickness Benefits Act. In addition, the Cabinet will continue to look for ways to reduce the consequences of quarantine for employers and employees as much as possible.

Clarification of turnover concept NOW

Employers who have applied for NOW 1 now have to calculate their actual loss of turnover. According to the Cabinet, there is a lack of clarity regarding the definition of turnover, which the Cabinet hereby clarifies.

The turnover concept of the NOW is primarily in line with accounting law. Turnover consists of the income that can be attributed to the regular activities of the company. The Covid-19-related compensations are a separate category of income. Earlier communication stated that 'all Covid-19-related subsidies' must be included in the turnover for the NOW. This is refined and clarified. In order to avoid double financing, only the following Covid-19-related subsidies are included here:

  • TVL
  • TOGS
  • Continuity contribution scheme for care
  • Availability contribution public transport companies
  • Compensation ornamental and food horticulture
  • Income/compensation received by employers when they redeploy employees in crisis jobs is considered turnover under the NOW.

TVL (Fixed Charges Allowance)

There will be a higher compensation percentage for the Fixed Charges Allowance (TVL). Currently, companies with more than 30% loss of turnover will be compensated up to a maximum of 50% of the fixed charges. The Cabinet has announced that, depending on the loss of turnover percentage, the TVL compensation percentage will be between 50% and 70%. The turnover threshold of 30% remains the same. This extension will be introduced (retroactively) for the fourth quarter of 2020 and the first quarter of 2021. With this, the Cabinet hopes to meet the needs in those branches that have (had to) suffer large losses in turnover. The TVL is available to companies in all sectors.

 

TVL 1

TVL 2

 

 

First period

Second period

Timeframe

June - September 2020

October - December 2020

January - March 2021

Limitation sectors

Yes

No

No

Minimum loss of turnover

30%

30%

30%

Compensation rates

50%

50-70%

50-70%

Maximum amount

€ 50.000,-

€ 90.000,-

€ 90.000,-

Minimum amount fixed costs (per 3 months)

€ 4.000,-

€ 3.000,-

€ 3.000,-

TVL2 first period– old situation

TVL 2 first and second period– new situation

Loss of turnover

Compensation

rate

Compensation fixed charges

Loss of turnover

Compensation

rate

Compensation fixed charges

20%

0%

0%

20%

0%

0%

30%

50%

15%

30%

50%

15%

65%

50%

32,5%

65%

60%

39%

100%

50%

50%

100%

70%

70%

Stock compensation for closed retail sector

Following the closure of the retail sector on 14 December 2020, the Cabinet announces in its letter of 18 December that SME entrepreneurs will be compensated for their surplus stock. These costs incurred for the stock will therefore not be covered by the TVL, but a one-off compensation will be provided through a mark-up on the TVL in the fourth quarter of 2020. Like the TVL, this stock compensation will be exempt from corporation tax and income tax. For more information, see the website of the central government

Event sector

The seasonal module in existence for the events industry will remain in force in the first quarter of 2021. Thanks to this module, event companies (e.g. festival organisers) whose turnover is highly dependent on the season can still claim the TVL. It is expected that the module for the first quarter of 2021 will be open for application at the beginning of February.

TONK - Temporary Support Necessary Costs

The Cabinet is giving a hand to all people who fall between the cracks (e.g. the self-employed or flex workers), who are not covered in the government’s existing support package. The Cabinet will therefore provide additional help through municipalities by temporarily providing compensation for necessary costs if these can no longer be paid due to a drop in income. For example, the Cabinet wants to use the TONK to help households meet their housing costs. The Cabinet expects to be ready with an implementation of this plan by 1 February 2021.

TOZO

The Cabinet previously announced that the Temporary Bridging Scheme for Self-employed Entrepreneurs in its current form will run until 1 April 2021. Entrepreneurs who have applied for a Tozo loan do not have to start paying off until 1 July 2021. The Cabinet will also help self-employed entrepreneurs to prepare for a new future (e.g. through coaching or training, etc.)

Tax measures

The tax deferral measures will remain in force until 1 April 2021. Businesses may apply for deferment of payment, or for an extension of a deferment already granted, until 1 April 2021 at the latest. For all entrepreneurs who have already been granted an extension this year, these will be automatically extended until 1 April 2021. Other tax measures will also be extended . Two new tax measures are:

  • VAT rate re COVID-19 vaccines and test kits is 0%;
  • The surcharge to stock and adjustment costs are exempt from income and corporation tax;

Travel allowances

The Cabinet will decide in January 2021 on the consequences of the measure on the untaxed fixed travel allowances. This measure will, for the time being, be extended until 1 February 2021 as a bridging measure. This concerns fixed, untaxed travel allowances that were already granted by the employer before 13 March 2020.

Corona jobs

The Cabinet will provide aid to crucial sectors such as health care and education with temporary corona jobs, through matching initiatives and extra budget. The Cabinet hopes that this will relieve the pressure on these sectors. The Cabinet will provide us with more detailed information on this in the near future.

Business start-ups

In its letter to the Lower House, the Cabinet writes that it has looked seriously into possible solutions to accommodate starting entrepreneurs, since the NOW and the TVL do not always offer a solution for these entrepreneurs. It has not (so far) been possible to arrive at a viable solution. The Cabinet advises them to make use of one of the credit schemes and/or apply for tax deferrals.

We will keep you informed of developments on this website.