In this week’s edition we have also included measures that may be taken to improve the Dutch VAT position, a Q&A regarding Dutch tax relief measures, a Q&A regarding Luxembourg VAT issues and measures to address Swiss VAT implications.
For the complete overview of the most important announced tax measures see here.
Following the adoption of the State aid Temporary Framework on 19 March 2020 to support the economy in the context of the coronavirus outbreak, on 3 April 2020 the European Commission has adopted an amendment extending this Temporary Framework by adding additional support possibilities for five types of aid measures. This includes targeted support in the form of deferral of tax payments and/or suspensions of employers' social security contributions to help avoid lay-offs due to the coronavirus crisis in specific regions or sectors that are hardest hit by the outbreak.
Last week many EU Member States again have notified a variety of aid measures to the European Commission under the Temporary Framework. Varying from direct grants to public loans and state guarantees.
For more information on the Temporary Framework and the various measures that were notified by the EU Member States see here.
The Flemish region foresees a compensation of EUR 3,000 for businesses that do not need to close but that can demonstrate that the turnover has decreased with at least 60% between 15 March 2020 and 30 April 2020 compared to the same period in the previous year. This compensation payment is not taxed.
Deferral of tax payments
We already mentioned that the Flemish Government decided that the assessment notices with respect to immovable property tax (onroerende voorheffing / précompte immobilier) which are usually issued in May will be sent out as from September 2020 for legal entities. This week, the Flemish Government has also exceptionally given the municipalities the opportunity to adjust the surcharges for the immovable property tax. As a result of this, the assessment notices for immovable property tax can at the earliest be sent out at the end of June whereas these notices are generally issued at the end of April/beginning of May. This means that the immovable property tax is also deferred for non-legal entities, be it for approximately a two-month period.
Accelerated VAT Refund for VAT return relating to February 2020
All VAT taxable persons submitting monthly VAT returns (incl. those who do not have a monthly VAT refund authorization or who are not considered to be ‘starters’), will be able to benefit from an accelerated refund of their VAT credit. As a result of this measure, the VAT credit will be refunded no later than 30 April 2020 (instead of 29 May 2020 or even 30 June 2020).
In order to benefit from the accelerated VAT refund, the following specific conditions should be met:
- VAT refund is requested by a VAT taxable person submitting monthly VAT returns;
- VAT return relating to February 2020 must be submitted by 3 April 2020 at the latest; and
- VAT return must be submitted through Intervat and the box "Request for refund" ("Aanvraag terugbetaling") must be ticked (VAT taxable persons can submit a corrective VAT return until 3 April 2020 in order to tick this box).
Note that, besides the specific conditions listed above, the general conditions to request a VAT refund remain applicable:
- Minimum refundable amount should be EUR 245;
- All VAT returns for the current calendar year must be submitted correctly;
- VAT authorities dispose of a bank account number of the VAT taxable person on which the refunds can be paid; and
- No objection against the refund (e.g. as a result of transfer of receivables).
Please note that this VAT credit can still be offset against other outstanding debts and can be subject to an audit afterwards.
The deadline of 3 April does not affect the possibility to submit VAT returns relating to February 2020 which do not result in a VAT credit or for which no refund is requested timely until 6 April 2020.
For a complete overview of the Belgian measures see here.
More taxes in scope for special deferral of tax payment obligations
On 2 April 2020, various taxes have been added to the list of taxes for which special deferral of payment obligations can be requested in connection with the Coronavirus, namely gambling tax, insurance premium tax, landlord tax, energy and environmental taxes, consumer taxes and comparable taxes levied in the Caribbean part of Netherlands. Please note that dividend tax has been explicitly excluded.
Further simplification special deferral of tax payment obligations
As of 2 April 2020 entrepreneurs can obtain special deferral of tax payment obligations for a period of three months through a digital portal.
The Dutch Tax Administration will send a confirmation receipt both in case of a digital request and in case of a request in writing. A single request covers all upcoming tax assessments that will be issued during the three months period. Hence, only one request for special deferral of tax payment obligations has to be filed.
For a longer deferral than three months, the request should be made in writing. If the amount(s) deferred do(es) not exceed EURO 20,000, the taxpayer needs to evidence the impact of the Coronavirus to its business, for instance by demonstrating that its turnover has dropped. If the amount(s) deferred exceed(s) EURO 20,000, an expert opinion will be required stating that it is likely that the financial issues of the business are mainly related to the Coronavirus.
The so-called G-account is used in the employment agency industry. Funds available on a G-account can in principle only be used for payments to the Dutch Tax Administration for wage tax, social security contributions and value added tax. If special deferral has been granted for these taxes in view of the Coronavirus, a request can be submitted to release amounts equal to the amount of deferral from the G-account. An instruction for submitting the requests will be published on the website of the Dutch Tax Administration.
Suppliers of electricity and gas
Suppliers of electricity and gas are offered partial deferral of payment of energy tax, renewable energy surcharge and value added tax for the months April, May and June. It is intended that the supplier will consequently not charge these amounts to the relevant customers in those months. The amounts deferred will be charged in one invoice in October.
This deferral of payment only covers the energy tax, renewable energy surcharge and value added tax relating to the supply of electricity or gas where the invoice is not on an advance basis, or where the term of the final invoice is less than one month. In practice this will almost always concern large electricity or gas consumers. Households and small business therefore do not fall under this deferral arrangement. The letter indicates that it is possible that small suppliers may not be able to participate due to costs of implementation and limited personnel.
Measures to improve the VAT position
Last week we published an article about measures that may be taken by taxpayers to improve their VAT position. Read more.
Q&A regarding tax relief measures due to COVID-19 crisis
Last week we published a Q&A on formal aspects regarding (i) special deferral of payment, (ii) notification of payment inability, and (iii) revision of provisional tax assessments.
For a complete overview of the Dutch measures see here.