Update NOW: how will the drop in turnover be calculated within group companies?

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Date:
23 Apr 2020

By:
Claire Vogel

Main arrangement
If the employer is part of a group, the entire group must be taken into account for determining the drop in turnover. Foreign legal entities must also be included if they pay wages to employees who are insured for employee insurances in the Netherlands. Employers who are part of the same group and who separately submit a NOW application, must therefore report the same drop in turnover. 

Recently businesses, trade unions and some government members have requested for easing of this rule, as the objective of the NOW scheme is job retention and this cannot always be achieved when turnover will be determined at group level. For example if the company has very diverse activities and the operating company is affected (for more than a 20% drop in turnover), while activities of other operating companies of the group continue (or even operate better) and therefore there is no 20% drop in turnover at group level. 

Amendment
The main arrangement remains unchanged, but for groups with less than 20% turnover loss, individual operating companies may submit separate applications, based on the decrease in turnover of the operating company (instead of the group). The operating company must have its own legal personality. Furthermore additional conditions apply: 

  • the group must declare that it will not pay any dividends, bonuses or will buy back own shares for 2020, until and including the date of the shareholders' meeting in which the annual accounts for 2020 are adopted; 
  • the employer with 20 or more employees must have an agreement with involved trade unions about job retention. For employers with less than 20 employees, an agreement of an employee representation is sufficient; 
  • there is no personnel B.V. within the group. An operating company may only report its drop in turnover for the payroll tax numbers that fall within its operating company. 

Finally, there are additional requirements for audits.