The rapid outbreak of the Coronavirus challenges everybody and forces one to face various dilemmas. The controlled slow-down of further infections is the top priority. Many customers of Beaufort are active in vital sectors and/or perform crucial tasks for our society. That’s why (contributing to) the slow-down of a further spread is our top priority as well. Especially in times of distress, Beaufort wants to support its clients by providing continuity and quality of its service (towards its clients) at the highest level. By taking the right steps on short notice, companies can stay in control of the situation and take the right actions. We recommend companies to perform a Quick Scan of the organisation. See this presentation for an elaboration of our approach.
Various regulations are implemented to tackle the (economical) impact of the Corona virus by governments and banks. On this page we would like to keep you informed of the most actual regulations for companies in the Netherlands:
1. Temporary emergency measure bridging for work perseverance (NOW-regulation)
The NOW 2 regulation will be extended by 9 months (3x three months) from October 2020 to the end of June 2021 (NOW 3). Under the current NOW 2 regulation, an entrepreneur who expects a loss of revenue (minimum 20%) can ask the UWV for a compensation of the salary expenses (currently max. 90% depending on the amount of lost revenue) for a period of three months. The minimum loss criterion will be increased from 20% to 30% under the new NOW 3 regulation as of January 2021. Under NOW 3, the compensation of salary expenses will be gradually reduced to 80% as of October 2020, 70% as of January 2021 and 60% as of April 2021.
In this way, companies can keep on paying their employees. The extended NOW scheme is comparable, but contains some changes in comparison with the first and second schemes. See additional information.
2. Temporary bridging regulation for self-employed entrepreneurs (Tozo-regulation)
The TOZO 2 regulation for supporting self-employed entrepreneurs will be extended by 9 months (3x three months) from October 2020 to the end of June 2021 (TOZO 3). The regulation will be executed by the municipality. Self-employed entrepreneurs can receive additional income support (for a period of three months) via an accelerated procedure. This will supplement the income towards the social minimum and does not have to be repaid. The conditions for applying for TOZO 3 have been changed. For instance, a capital test (no more than € 46,520 in available cash and cash equivalents) will now be part of the TOZO 3 procedure.
Support from this temporary measure is also available by means of a loan for equity with a reduced interest rate.
The TVL regulation helps SME entrepreneurs who have been affected by the Corona crisis and having problems paying their fixed costs (excl. salary expenses). The TVL is intended for entrepreneurs in specific branches and is implemented by the RVO.
The current TVL scheme will be extended for 9 months (3x three months) until the end of June 2021. Under the current scheme SME entrepreneurs receive a reimbursement with a maximum of € 50,000. This reimbursement will be increased to a maximum of 90,000 with effect from October 2020.
The TVL is dependent on the size of the company, the amount of the fixed costs and the turnover loss. Until January 2021 a turnover loss of at least 30% applies. Thereafter, the minimum turnover loss criterion will be gradually increased to 40% in January 2021 and 45% in April 2021.
4. Temporary Bridging Scheme Flexible Labor (TOFA-regulation)
The government has introduced a new scheme (Tijdelijke Overbruggingsregeling voor Flexibele Arbeidskrachten (TOFA)) for employees with a flexible contract who have (almost) no income due to the Corona crisis and cannot receive an unemployment benefit. It concerns a one-off payment of € 1.650 for the period March, April and May 2020 (€ 550 per month). The sheme will take effect at the end of June 2020. See for the terms and conditions the UWV.
Credits and guarantees
1. Extension of regulations considering the guarantee on entrepreneurial financing (GO-regulation)
Companies that face trouble when attracting bank financing and guarantees can make use of the GO-regulation (‘Garantie Ondernemersfinanciering’). The ministry has increased the limit from €400 million to €10 billion. With the standard GO-regulation, the ministry supports both large and medium-sized companies by means of a 50% guarantee on bank loans and guaranties (minimum €1.5 million and max €150 million per company). Since April 7th 2020 the guarantee has increased to 80% for large companies and 90% for medium-sized companies under the condition that companies facing problems due to the Corona crisis.
2. Interest discount small entrepreneurs on micro credits (Qredits)
Micro credit supplier Qredits finances and coaches a large group of small entrepreneurs and start-ups, that have a hard time attracting financing from banks. One could think of entrepreneurs in the hospitality industry, retail, personal healthcare, construction, and business services. Qredits will implement a temporary crisis regulation: Small entrepreneurs who are affected by Corona related problems are offered postponement of repayments for the duration of six months. The interest is automatically lowered to 2% during this period. The ministry supports Qredits with this regulation with a maximum of €6m.
3. Extension of the guarantees on mid and small cap credits (BMKB-regulation)
The ministry of economic affairs and climate guarantees credits to entrepreneurs by means of the BMKB-regulation, so they are enabled to attract funding more easily. For this, entrepreneurs can contact credit issuers, such as banks. In the normal regulation (BMKB-B) the guaranty is limited to 50% of the credit (max €1.5 million). The BMKB scheme has been expanded because of the Corona crisis (BMKB-C). The guaranty in this new BMKB-C scheme is limited to 75% of the credit. The guarantee of the government is maximised at 90% of the guaranteed credit (both BMKB-B and BMKB-C). In this way, banks can provide credit easier and faster, and companies have the opportunity to borrow more money faster. Furthermore, the regulation has been further enhanced than previously announced at Thursday the 12th of March 2020, and will also apply to bridge and current accounts with a duration of max. two years. Since April 2020 the BMKB premium has been lowered from 3.9% to 2%.
4. Temporary guarantee for agricultural companies (BL-C regulation)
For agricultural companies, a temporary guarantee for working capital will be provided within the BL-regulation (‘Borgstelling MKB-Landbouwkredieten’). Hereby, the ministry guarantees the credits of agricultural entrepreneurs. The adjusted BL-regulation is in effect per the 18th of March 2020.
5. State guarantee for credit insurance
The Dutch State will provide a guarantee of €12bln. to secure the credit insurance of companies which supply goods to small medium enterprises (SME). By using this State guarantee the government wants to prevent that credit insurers decrease or withdraw their insurance limits. The guarantee ensures risk sharing between the insurers (10%) and the State (90%), up to a volume of €1,0 bln and provides an additional safety net by the State to cover up €12 bln in total.
6. Extension insurance export credits
The new regulations for the extension of export credits imply that short-term export credit insurances are covered as well (in the past only >2 years, currently also <2 years). In addition, an extension of the possibilities for domestic coverage will be provided, as well as a relaxation of the international policies with coverage for additional countries. Furthermore, procedures are extended and accelerated, and a higher percentage of working capital will be covered. This package of regulations will enable companies to cover more risks as a result of state guarantees. This will ensure the continuation of international trade and can prevent loss of export and jobs. Currently, people are working on a further acceleration of the lead times of export credit insurances.
7. Corona bridge loan for Start-ups, Scale-ups and innovative companies (COL)
Startups and scale-ups will be able to apply for credits between €50.000 and € 2 million from Regional Development Companies (ROMs) For more details about terms and conditions and how to apply, see COL.
8. Temporary bridge loan program for innovative Star-ups and Scale-ups (TOPSS)
The Regional Development Companies (ROM’s), Invest-NL and Techleap.nl jointly offer temporary bridge loans from € 2 million for innovative start-ups and scale-ups. For more details about terms and conditions and how to apply, see Invest-NL.
9. Small Corona Credit Guarantee Scheme (KKC):
In addition to other Corona Credit regulations a new scheme has been introduced for small financially strong companies. SME’s with relatively small financial needs may be eligible for a bridging loan of up to 50,000 euro under the Small Corona Credit Guarantee Scheme (Klein Krediet Corona garantieregeling or KKC). The KKC loans will be offered by ABN AMRO, ING, Rabobank, Triodos, Volksbank and some accredited BMKB credit providers with a maximum loan term of 5 years and a maximum interest rate of 4.0%.
The scheme first has to be approved by the European Commission before you can turn to your credit provider. Approval and opening of the KKC regulation will be expected mid-May.
1. Relaxation of postponement of tax payments and reduction of fines by the Dutch tax authority
The period for which affected entrepreneurs can request for postponement of tax payments will be extended until 1st of October 2020. The tax authority will then stop with collections immediately. This applies to all income, corporate, VAT, and salary taxes. Fines for over due payments will be wavered. It is not necessary to provide any evidence when applying for this regulation. However, this will be required in a later stage. The interest on over due payments will be temporarily reduced from 4% towards (almost) 0%. This reduction will apply to all taxes.
2. Additional tax regulations
The government has announced six new tax regulations to support entrepreneurs during the Corona crisis. These regulations will provide more financial support next to the regulations which already have been taken.
The additional tax regulations include:
- Reduction of the “appropriate wages” criterion in case of a substantial equity share (aanmerkelijk belang).
- Simplifying the hour criterion for self-employed entrepreneurs without personnel (ZZP-ers);
- one-off increase of work-related costs (werkkosten regeling);
- Tax settlement loss 2020 with profit 2019;
- Postponement of new bill “Excessief lenen bij eigen vennootschap”;
- Break for mortgage repayment obligations.
3. Tourism taxation
The ministry is negotiating with the municipality (‘Vereniging Nederlandse Gemeenten’ (VNG)) whether local taxation of entrepreneurs can be cancelled and the already issued assessments can be withdrawn. This is especially the case for tourism taxation.
Sector specific regulations
1. Agreements about financial security of healthcare providers (ministry of community healthcare and youth & security)
Due to the Corona crisis, many healthcare institutions experience financial insecurity, because they now have to provide much more or much less healthcare than was expected. The ministry and the municipalities have therefore made agreements about safeguarding the financial security of healthcare providers within the laws ‘Communal support’ and the ‘Youth-law’. This covers temporary measures (at least until the 1st of June 2020) for a.o. the financing of additional costs, compensation for missed revenue, maintaining of liquidity, and the relaxation of accountability. In this phase of the crisis, healthcare providers require this to ensure continuity and safeguard support and availability of professionals there where they are required the most.
2. SET Covid19: Stimulation digital healthcare (SET-regulation)
To enable digital healthcare, the SET-regulation is temporarily extended. Healthcare providers or supporters that want to put additional effort in digital healthcare for patients at home during the Corona crisis, can qualify for the extension of the SET-regulation. This extension provides a grant for digital applications for clients or their caretakers. The grant is an amount between € 25,000 and €50,000 of which max. 40% can be used for the acquisition, lease, or licensing costs of digital applications. Furthermore, the grant can be used to hire external consultants for implementation services. No own contribution is required.
3. Support Local media
Local media whose advertising income decrease can apply for support from the government under the new Temporary Support for Local Media scheme.
4. Additional support cultural sector
The government announced an additional amount of €482 million for supporting institutions which are essential for the cultural sector. Main objective is securing employment and investments for the new cultural season. The additional support will be provided by subsidies and loans.
Financial sector regulations:
1. Temporary (6 months) postponement of repayments for mid and small cap customers (<€2.5m)
Small cap companies that are healthy in their core will get a six month postponement of repayments on their current accounts. This was decided by the ABN AMRO, ING, Rabobank, Volksbank, and Triodos Bank.
This combined approach of banks provides space for business customers in all industries with a maximum debt of €2.5m. For the group with a higher debt position, the banks will closely monitor the developments. This can lead to additional steps in collaboration with the ministry and supervisory institutions. This implies a minimum regulation on top of which the banks can deliver additional tailor-made services for business banking.
The ABN AMRO bank has increased the limit towards €50m as per the 27th of March 2020.
2. Continuity contribution by health insurance companies
Health insurance companies will provide a continuity contribution to healthcare providers whose turnovers have decreased significantly due to the Corona crisis. By paying these contributions health insurance companies want to safeguard medical care after the Corona crisis.
The continuity contribution will be based on their normal turnovers (based on the period March until June 2020). The percentage will vary between 60% and 85% and will be dependent by healthcare provider. The contribution will be paid in May 2020.
3. Support hospitals UMC’ and mental healthcare by health insurance companies
In the first half of 2020 health insurance companies, hospitals and University Medical Centres (UMC’) agreed on an advance payment arrangement (100% of their expected turnover) to avoid financial difficulties caused by the Corona crisis. The main reason for that is to safeguard medical care after the Corona crisis. In addition to this, health insurance companies, hospitals and University Medical Centres (UMC’) agreed in July 2020 on a definitive arrangement for lost income and additional costs. This will be funded by the collective insurance premiums and, if needed, the reserves of the healthcare insurance companies. Next to this, health insurance companies and the Dutch mental healthcare (GGZ) announced that an Corona agreement will be prepared for the short term for larger mental healthcare providers. The main reason for that is to safeguard mental care after the Corona crisis.
4. Payment scheme Pension funds
The Dutch pension funds have announced that companies can apply for payment schemes, within the legal framework.
For an informal conversation contact us
and discover how we can help you.