Insights
The government’s support and recovery package for Q4 2021 and Q1 2022 (NOW-5 and NOW-6)
Due to the increasing number of Covid infections, the government announced social contact-restrictive measures on 26 November 2021 and 14 December 2021, including a new support and recovery package to secure jobs and protect the economy. In addition, the cabinet announced additional support measures on 21 December 2021. In this article we provide an overview of the most relevant information.
NOW-5
The Cabinet has initiated the fifth Temporary Emergency Scheme for Work Retention (NOW-5).
NOW-5 applies to the period 1 November 2021 to 31 December 2021. The compensation rate is set at 85%, including a turnover loss threshold of 20%. Initially, a maximum turnover loss of 80% could be declared, but this rate was increased to 90% on 21 December 2021. This means that the maximum compensation can be 85% of 90% turnover loss. As the NOW-5 advance payments have already started, this increase will (only) be taken into account in the final determination of NOW-5. Furthermore, September 2021 becomes the reference month for the wage bill and the reference turnover period becomes 2019, divided by 6 (unless you are a starter). The bonus and dividend ban will continue to apply under the NOW-5 regime as before. This means that there is a prohibition on paying out bonus or dividend to directors / executives for employers who apply for NOW-5 and receive a subsidy advance or final subsidy amount of €125,000 or more. It is possible to apply for a NOW allowance via the UWV website. For clarification see the schedule below:
| NOW 5 | |
| Timeframe | 1 November 2021 – 31 December 2021 |
| Minimum loss of turnover | 20% |
| Turnover limit | 90% |
| Compensation rate | 85% |
| Flat-rate surcharge | 40% |
| Total wage bill exemption | 15% |
| Maximum wage compensation | 2x daily wage |
What is new?
- When applying for NOW 5, employers cannot choose over which months they want their loss of turnover to be calculated. This will be calculated for each employer over the months of November and December 2021.
- The wage bill exemption percentage is increased from 10% to 15%. Employers heard relatively late in November 2021 of a new NOW scheme. Therefore, in the meantime, they may have had to let go of employees or no longer call them on for work. This has an effect on the wage bill and as a result they would (wrongly) receive a lower NOW compensation, while they were unable to take this into account in advance. A higher exemption percentage covers this problem.
- Starters (entrepreneurs who started their business between 1 February 2020 and 30 September 2021) can now also apply for NOW 5. They can use the period 1 July 2021 to 31 October 2021 as their reference turnover period.
- The Working Time Reduction scheme (WTV) is back and remains open alongside NOW 5. The WTV is not intended for corona-related applications. Employers can make use of the WTV if they have to deal with special circumstances that do not fall under the ‘normal business risk’. For example, a fire or lightning strike.
NOW 6
Meanwhile, the Cabinet has also announced a NOW-6 scheme for the months January to March 2022. NOW-6 will in principle be similar in terms of conditions to the NOW-5 scheme (see table above), but the Cabinet is currently still considering a number of issues. The final conditions for NOW-6 will therefore be communicated by the Cabinet in January 2022. The aim is to open the application portal for NOW-6 compensation by the end of February 2022. We will of course inform you as soon as more is known about this.
TVL Q4
The Fixed Charges Allowance (TVL) has been reopened due to the new corona measures and the applicable conditions have been expanded compared to the last TVL scheme. A choice can be made between a reference period for turnover loss during the fourth quarter of 2019 or during the first quarter of 2020. Initially, a minimum turnover loss threshold of 30% would apply. However, on 21 December 2021 the cabinet announced that this threshold would be lowered to 20%.
The following requirements apply to the TVL:
| TVL Q4 | |
| Timeframe | 1 October 2021 – 31 December 2021 |
| Limitation sectors | No |
| Minimum loss of turnover | 20% |
| Compensation rate | 100% |
| Maximum compensation amount (SME companies) |
€ 550,000 |
| Maximum compensation amount (large, non-SME companies) |
€ 600,000 |
| Minimum amount fixed charges (per 3 months) | € 1,500 |
| Maximum number of employees | None |
| Minimum compensation | € 1,500 |
The scheme is already open for applications but note that the government has made one reservation regarding the TVL scheme in Q4, that the reduced rate of 20% as the minimum turnover loss threshold still needs to be approved by the European Commission.
TVL Q1 2022
The government has announced that the TVL in the first quarter of 2022 (January, February & March) will remain the same as the TVL conditions in Q4 of 2021, except for the turnover loss threshold. This is expected to be increased to 30% (instead of 20%) in Q1 of 2022.
Fiscal measures
Postponement of tax payment
The postponement of tax payment will be extended by the Cabinet until 31 January 2022. This offers entrepreneurs the possibility of extra cashflow during the contact restriction period. This tax debt will be added to the tax debt that entrepreneurs must repay in 60 months from 1 October 2022.
Entrepreneurs who did not previously apply for a defferal of payment due to the Corona crisis or who have meanwhile fully paid the deferred tax debt, may (again) run into payment problems due to the additional Corona measures. For these groups of entrepreneurs, the possibility of requesting a deferral of payment for the payment of their taxes over the fourth quarter will therefore be opened.
In January 2022, the tax liabilities will be reassessed against the measures applicable at that time.
Cross-Border workers
The Netherlands has now reached an extension of the agreements on the taxation of cross-border workers with Belgium, at least until the end of March 2022. With Germany, an extension until the end of March 2022 has also been agreed (which will be laid down in an agreement as soon as possible).
Recovery of tax debts
The Cabinet has announced that it will along for more time before initiating the collection of tax debts. This concerns tax debts for which no (special) postponement has been granted – for example, due to the corona crisis. In January 2022, companies and individuals who have not yet paid their debts will receive a letter about how they can still apply for a moratorium. Penalty orders that were scheduled as from 7 January 2022 will therefore be postponed for at least one month.
Furthermore, the recovery interest rate wil