Corona Business Incentives in The Netherlands

Entrepreneurs in the Netherlands can be affected by the Corona Situation, and their revenues and profits might be substantially lower. The Dutch government has decided to subsidize Dutch companies, and provides grants to Dutch companies that experience a loss of revenue of at least 20%. After the successful launch of the NOW scheme, for march-May, the Dutch government has decided to launch a new NOW scheme, which will run upto August 2020.

This NOW 2.0 again offers entrepreneurs a contribution towards the wage costs of personnel. This time for the salary costs for the months of June, July, August and September 2020.

However , there are a number of important differences compared to the first version of the NOW that applied to labor costs for March, April and May 2020 . Below we describe the functioning of the NOW 2.0 and we discuss the differences with the NOW 1.0 .

1) How does the NOW (2.0 )scheme work?

The higher the loss of turnover, the higher the compensation. Companies that suffer at least a 20% loss of turnover over 4 months (June to September) can receive a maximum compensation of 90% of the wage bill in proportion to the fall in turnover. With a loss of turnover of 100%, this is 90%, for example, with a loss of 50%, this becomes 45% of the total wage bill, etc. The sales decrease is determined over a period of 4 months starting on June 1, July 1 or August 1, 2020.

2) Interaction NOW 1.0 and 2.0

It doesn't matter if you have had NOW 1.0 in March, April and May to participate in NOW 2.0. Are you making a NOW application for the first time from 6 July? Then you can start the sales decline period on June 1, July 1 or August 1. If you appeal to the NOW scheme for the second time, the turnover period must correspond to the period chosen in the first period.

3) 40% Surcharge

UWV takes the social insurance wage as the basis. The same surcharge of 40% is added to this for all companies for employer costs such as the accrual of holiday pay, pension and employer contributions. The NOW scheme therefore also contributes to costs other than labor costs. There is a maximum wage per employee of 9,538 euros per month. Salary above this amount is not compensated.

UWV compares the wage bill in the subsidy period with the wage bill of March 2020 (or November 2019), as known to the tax authorities.

4) Calculate revenue loss

The NOW scheme therefore revolves around turnover and wage bill. After opening on 6 July, the UWV will make a calculation tool available to determine the amount of your turnover loss. The wages bill of March 2020 (or November 2019) is taken as the starting point for all companies.

For NOW 2.0, you enter the expected decline in revenue in an associated 4-month period, starting on June 1, July 1, or August 1, 2020. The 2019 revenue is the reference period. You divide that annual turnover by 3 and compare it with the expected turnover. Companies that only exist since 2019 and companies that have taken over another company may use a different calculation.

5) Payout

If the UWV is positive, the UWV will pay an advance, spread over 2 terms. You will receive the first payment (for the first 2 months) as soon as possible after the UWV has approved your application. You will receive the second payment about 2 months later.

6) Final settlement

You must apply for the subsidy to be determined within 24 weeks after the end of the period for which NOW is granted. If the advance is higher than 100,000 euros, you need an auditor's report. If the advance is above EUR 20,000 or a determination amount above EUR 25,000, you must provide a statement from a third party confirming the drop in sales.

The UWV makes a final statement within 52 weeks (1 year). It may turn out differently than expected in the first assignment. Entrepreneurs with acute liquidity problems may be able to claim other measures from the emergency package .

7) What are the conditions?

  • To qualify, you as an employer must expect at least a 20% loss of turnover during 4 months.

  • The applicant pays 100% to his employees.

  • The employer is obliged to use the subsidy to pay labor costs.

  • The applicant is obliged to inform employees about an granted application.

  • The employer must submit a payroll tax return under the Wages and Salaries Tax Act 1964 at the prescribed times.

  • Employers must encourage their employees to request development advice or to receive training. You must make a statement about this with the NOW application. The cabinet is allocating EUR 50 million for retraining staff through the NL crisis program. From July, employees can follow free online training and development advice.

  • A company that uses the NOW scheme is not allowed to distribute profit and bonuses to shareholders, the board and management over 2020 to the shareholders' meeting in 2021. This only applies if the advance on the allowance is 100,000 euros or more. Or if the final allowance is 125,000 euros or more. For operating companies that have received a NOW subsidy as part of a group, you may also not distribute profit or bonuses to the parent company or the group head of which the operating company is part. Even if the advance is less than 100,000 euros or the final compensation less than 125,000 euros. The group head or parent company of the group must agree to this.

8) Conditions of dismissal

You must repay 100% of the wage cost subsidy that you receive for employees who have been fired for business reasons. Until the end of May, companies that fired employees for business reasons received a 50% discount on top of that. That 'termination fine' has been largely reversed because there are companies that need to restructure to get through the corona crisis. Layoffs are sometimes unavoidable.

The following dismissal rules apply within NOW 2.0:

  • During the period from 1 June and 30 September 2020, the applicant will not submit a dismissal application to UWV for commercial reasons. Does he do that? UWV will then process this dismissal application and decide on it. When the NOW subsidy is determined, a correction is made for this. It is irrelevant whether the UWV has granted or rejected the dismissal application.

  • Companies wishing to lay off 20 employees or more, but receiving NOW, must have an agreement with the union or other employee representation. If there is no agreement, an application for mediation must have been submitted to (a yet to be established committee of) the Labor Foundation. If there is no agreement or request for a mediation, the NOW will receive a discount of 5% on the total subsidy amount.

  • The employer is obliged to submit dismissal applications to UWV no earlier than 4 weeks after the WMCO notification (notification of the intention to collective dismissal, the Collective Redundancy Notification Act). The parties can use these 4 weeks to reach an agreement.

  • The employer will be given the opportunity to withdraw a submitted dismissal application.

9) Afterwards

  • The applicant must keep verifiable records in which all data of interest can be verified. As an applicant, you must provide access to this administration up to 5 years after the subsidy has been determined if requested.

  • If things happen that may be important for a decision to change the cancellation or determination of the subsidy, you as an applicant are obliged to report this to the UWV.

  • After the end of the subsidy period, the applicant must submit a final statement of the decrease in turnover, including an auditor's report.

When the NOW subsidy is definitively determined, the monthly wages of the employee (s) for whom dismissal has been applied for (as calculated for the subsidy determination) are deducted from the subsidy, according to the calculation method from the subsidy scheme (3 x wage sum reference month). x 1.4 x 0.9).

If it appears that the conditions have not been met, UWV can suspend the advance or reclaim an already given advance.

10) How do I submit an application?

INCO Business Group can assist with the application of the NOW scheme, this is part of our Company Officer Support

The NOW runs through the UWV and can be requested from 6 July. Companies that meet the conditions and will complete their application completely and correctly will receive an advance within 2 to 4 weeks. For the application, no eHerkenning or other form of authentication and authorization will be required. You can submit applications with your payroll tax number. You will not receive a confirmation of receipt. You will see on the last screen that your application has been received. The government checks for fraud . The UWV website can apply for NOW 2.0 once it is opened.

You will need this information later:

  • Information about your company (name, address, telephone number, e-mail, name of position and department of the contact person).

  • For which payroll tax number you submit the application.

  • What the starting date of the period of the consecutive months is.

  • How much loss of turnover you expect in this period. You will soon be able to calculate this with a special calculation tool.

  • The bank account number that the Tax and Customs Administration uses for the payroll tax payments.

  • The ascription of this account number.

  • A signed letter of intent on the application. You hereby declare that:

  • You have entered the correct information and have been complete.

  • You understand and accept that the provisions of the General Administrative Law Act apply to your application.

  • No moratorium or bankruptcy has been applied for.

  • You agree to the storage and processing of the data, according to the General Data Protection Regulation (GDPR).

  • You are authorized to represent the company (this can also be someone authorized by the employer, for example an employee of an administration office).

Also please consider...

You must have submitted a payroll tax return before applying

Have you not yet sent your payroll tax return to the tax authorities? Then do this before applying NOW 2.0, because the UWV needs this information in the assessment.