Not surprisingly, although many companies had neatly started making their first repayments by October 2022, they soon realised that this was not sustainable. In this (near) recession, many companies simply do not create enough cash flow to pay overdue taxes on time in addition to normal liabilities. The economic outlook is still not rosy in early 2024. The Netherlands Bank expects only a 0.3% increase for this year and Eurozone growth is also expected to remain below 1%.
Solutions
If it is not possible to meet the monthly corona obligations, there are a number of possible solutions. On the one hand, one can look at reducing repayments with the bank, reducing investments or, for example, sale and leaseback of the business premises. If all this is not possible, the Tax Administration also has a number of solutions for the taxes covered by the Special Deferral. We briefly mention them below:
- Pay break. It is possible to request not to pay for up to six months. However, the consequence is that the monthly instalments will increase thereafter, as the total repayment period remains 60 months.
- Extension of repayment period. If a business is viable in principle but unable to repay taxes within 5 years, it is possible to apply for an extension of up to 7 years. As a result, monthly instalments decrease.
Condition
The condition for both schemes is that the normal tax liabilities have been paid on time and in full in each case since March 2022. In both cases, the recovery interest payable increases. If both measures do not yield adequate results, there is still the possibility of applying for partial remission of the tax debt. Given the current problems, the Tax Administration is currently willing to grant customised relief for this purpose and until 30 April 2024, more lenient conditions apply. A condition is always that the business is basically viable and that the Tax Administration is paid at least the same percentage as the unsecured creditors.
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