Netherlands enacts tax measures in response to COVID-19

By Jian-Cheng Ku & Rhys Bane, DLA Piper Nederland N.V.

The Dutch government announced several tax-related measures in the context of the current COVID-19 pandemic on March 12 and March 17.

The Dutch government’s measures, titled the ‘Emergency Package for Jobs and the Economy,’ mainly aim to improve near-term liquidity of businesses. The measures include automatic deferral of payment of taxes due upon request, the reduction of interest on tax and interest on overdue tax to 0.01%, and the possibility to have provisional assessments reduced.

Several other measures have also been taken with respect to the financial markets (i.e., government guarantees and credits, mainly for small and medium-sized businesses) and employers (i.e., allowing for short-term working in the most heavily hit sectors and a reduction in certain employee insurance contributions).

Automatic deferral of tax payments

The Dutch tax authorities will automatically defer payment of taxes at a business’ request. Generally, a third party expert declaration must be provided alongside the request; this is currently not necessary. The assessment of the merits of requests will take place at a later stage.

The Dutch tax authorities will automatically defer payment of taxes at a business’ request. Generally, a third party expert declaration must be provided alongside the request; this is currently not necessary. The assessment of the merits of requests will take place at a later stage.

Furthermore, fines for late payment of taxes will not be imposed or will be revoked in the short term.

The Netherlands government is currently exploring possibilities to partially defer the levying of Dutch energy tax and the surcharge for sustainable energy to increase near-term liquidity of electricity and gas suppliers.

Reduction of interest on tax and interest on overdue tax

The interest on overdue tax will be reduced from 4% to 0.01% effective March 23. This interest applies to all taxes due.

In addition, the interest on tax will be reduced from 8% for the Dutch corporate income tax and from 4% for all other taxes to 0.01%.

The Netherlands government is implementing the reduction in the interest on tax for all taxes other than the Dutch personal income tax as of June 1, 2020. The interest on tax for the Dutch personal income tax will be lowered to 0.01% as of July 1, 2020.

Revision of provisional assessments

Taxpayers’ requests for the revision of provisional assessments will be granted automatically. This means that less tax must be paid to the Dutch tax authorities immediately.

If the amount of tax on the provisional assessment is lower than the tax that has already been paid in the current financial year, the Dutch tax authorities will refund the excess tax paid.