Compensation for the wage costs for Dutch companies during the corona crisis. During the corona crisis, the cabinet wants to protect people’s jobs and incomes. Therefore, an economic emergency package was announced by the Dutch Government on March 17. One of the measures is a compensation for the wage costs for companies that are now losing turnover. The terms of this Temporary Bridging Emergency Action for Job Retention (NOW) were announced today. UWV (Dutch Employee Insurance Agency) strives for companies to submit an application from April 6. Companies that meet the conditions can – upon their filed request thereto – expect an advance within two to four weeks.… Read More
Temporary reduction of collection interest and tax interest
If you do not pay an assessment on time, you normally have to pay 4% recovery interest from the moment the payment term has expired. As of March 23, 2020, the tax authorities will temporarily reduce the collection interest from 4% to 0.01%. This applies to all tax debts.
The tax office charges tax interest if a tax return was not filed on time or was filed for an incorrect amount. The tax interest rate is 8% for corporate tax and 4% for other taxes. The tax office will also temporarily lower the tax interest rate to 0.01%.
This temporary measure will apply to all taxes subject to tax interest. The temporary reduction of the tax rate will take effect from 1 June 2020, except for income tax. For the income tax, the reduction will take effect from 1 July 2020.
Entrepreneurs with an annual turnover under € 20,000 may be exempt from paying VAT if they opt for the so called small businesses VAT scheme (“KOR”). In order to participate in this small businesses VAT scheme, an application is to be made with the Dutch tax office at least 4 weeks before the start of the oncoming VAT quarter.
If you are already exempt from paying VAT, your exemption will continue automatically. If you no longer require a VAT exemption or do not qualify for the new exemption rules, you must inform the Dutch tax office.
When applying the small businesses VAT scheme, such entrepreneurs with an VAT exemption no longer charge VAT to their clients. Also, when applying the exemption, such small businesses do not have to file a VAT return, meaning they do not have to pay VAT but can also not deduct VAT. In addition applying small businesses are exempted from keeping a VAT administration.
The exemption of not having to file VAT returns and keeping an administration only applies to goods and services provided within the Netherlands. Small businesses that apply the exemption, will have to continue the exemption for at least 3 years, unless the annual turnover exceeds €20,000. In case of exceeding the tax office must be notified.
New as of 2020 is that legal entities (e.g. the B.V.) are also eligible for the small businesses VAT scheme.
We can assist to check the pro’s and cons of this new VAT exemption and to apply for the new scheme. We can also assist your company with all required tax, legal and accountancy needs.
Salary criterion –
A salary criterion is to be met to apply the 30% ruling, below is the annual indexation for the 2020 minimum salary to qualify for the 30% ruling. There are three qualifying salary groups:
1. Scientists do not have a salary minimum;
2. People below 30 years of age with a Masters education have a minimum salary requirement of EUR 29,149 (2020) / EUR 28,690 (2019) / EUR 28,350 (2018) excluding the 30% reimbursement and EUR 41,642 (2020) / EUR 40,985 (2019) / EUR 40,500 (2018) including the 30% reimbursement;
3. For Expats that do not match the groups under 1 and 2, a minimum salary requirement applies of EUR 38,347 (2020) / EUR 37,743 (2019) / EUR 37,296 (2018) excluding the 30% reimbursement and EUR 54,782 (2020) / EUR 53,918 (2019) / EUR 53,280 (2018) including the 30% reimbursement.
Please note that these minimum amounts are subject to annual indexation. In principle the salary criterion may not be decreased pro rata in case of a part time employment. There is an exemption on this rule in case of parental leave.
The salary criterion in principle replaces the prior criterion of required specific skills, in that sense the ruling has become more accessible. Please note however that the salary criterion is a continuous test, the employer is therefore held to continuously check whether all requirements are still met by its employee.
We can assist with the full process of obtaining the 30%-ruling, please contact us.
All legal entities are required to have eHerkenning to file their tax returns in 2020. For all legal entities, such as the ‘B.V.’, it is required to have a digital log in account called ‘e-herkenning’ (security level eH3 and up) in case they prepare their own tax return filings. The current portal for entrepreneurs will no longer be active for legal entities. Sole proprietors, such as the ‘eenmanszaak’, will remain to able to file through this portal.
Wage tax returns
From 1 February 2020, employers who submit their own wage tax return for 2020 via the website of the tax office can only do so via the new My Tax Office (MBD-Z) portal. Sole proprietors can log in there with DigiD, the other employers must use eHerkenning for this. The employers to whom this applies are already informed through a letter from the tax office.
The tax office advises employers who prepare their own wage tax returns and do not yet have access to MDB-Z to purchase e-Recognition as soon as possible from one of the suppliers recognized by the government. Alternatively a tax intermediate can take care of your tax filings. This allows employers to submit their wage tax returns in a timely manner. The monthly declaration for January 2020 must be submitted and paid for no later than 29 February.
VAT and corporate income tax returns
It is expected that – during the course of the year 2020 – also tax returns for VAT (legal entities) and corporate income tax can only be submitted through e-herkenning.
Be aware of timely filing of the annual accounts at Chamber of Commerce.
Dutch legal entities such as BVs, NVs and cooperatives are required to file their annual accounts with the Dutch Chamber of Commerce (‘KVK‘) each year. These are the best known legal forms. But there are more legal forms with a requirement to file. Financial details of companies can be viewed by third parties and stakeholders by depositing. Depositing does not apply to sole traders.
A financial statement is a financial report of your company for the past year. Not or non timely depositing has consequences. Since September 2018, the law also imposes additional requirements on the information in the financial statements.
The basic principle is that you deposit the annual statement with KVK within 12 months after the end of a financial year. So the annual accounts for the year 2018 have to be filed before December 31st 2019. The management of the legal person is responsible for this. Has the financial statement been adopted? Then it must be at KVK within 8 days.
Adopting the annual financial statements is often quite a job. After drawing up by the management, the shareholders and possibly a supervisory board must also approve the annual accounts.
What is the timeline? The terms differ per legal person. If the financial year is the same as the calendar year, the following terms apply:
Within 5 months after the end of the financial year (no later than 31 May), the board prepares the annual financial statements and submits them to the shareholders. The shareholders grant the board a maximum of 5 months’ deferment for the preparation (31 October at the latest) in the event of special circumstances. The shareholders then have 2 months to adopt the financial statements. The final deposit date is therefore July 31 (5 + 2 months). With a maximum delay this is December 31 (5 + 5 + 2 months).
Exception to the rule
Are all shareholders also a director or supervisory director? Then the signing of the annual financial statement will immediately provide for this. Separate determination by the shareholders is not necessary. The extra 2 months expire. In this case, a BV will deposit on 8 June (5 months + 8 days) and no later than 8 November (5 months + 5 months + 8 days).
No timely determination
It is possible that the shareholders do not adopt the annual accounts in time. Not depositing is not an option. As the board of directors, you have a duty to file a provisional annual statement in such a case. This must be done within 7 months (31 July at the latest). With a maximum delay this is within 12 months (31 December at the latest).
No or late filing
Not depositing or not depositing on time has consequences. Within the bankruptcy of a legal person, this can be regarded as improper management. Directors can be held jointly and severally liable for any debts. In addition, it is an economic offense whereby the Public Prosecution Service can impose a substantial fine via the Tax Authorities (a maximum of 20,500 euros). Reason enough to adopt and file the annual accounts on time!