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COVID-19: Netherlands Clarifies Rules For Payment Of Deferred Tax Liabilities

Monday, September 7, 2020

The Dutch tax authority has issued guidance on the repayment requirements for taxes deferred during the COVID-19 health crisis.

Under a scheme put in place earlier this year, businesses can request an automatic three-month deferral of numerous taxes. Requests for a longer period of deferral must be more detailed and, on request, may cover other taxes. These applications can be filed up until October 1, 2020. The automatic deferral applies to all assessments of income tax, health insurance levy, corporate tax, payroll taxes, and VAT.

To benefit from the concession, businesses must guarantee that they will not pay dividends or bonuses or buy back their own shares.

Taxpayers are required to repay deferred taxes in fixed monthly amounts over a two-year period from January 1, 2021, to January 1, 2023. In the period to December 31, 2021, a reduced interest rate of 0.1 percent will apply. The scheme allows taxpayers to repay the deferred amounts more quickly if they so wish.

The tax authority confirmed that tax liabilities arising after the expiry of the deferral period must be paid under normal rules.