Deferral of tax payment during corona
During the corona crisis, the Emergency Measures Corona Crisis Decree included conditions under which a deferral of payment could be requested from the Tax Administration. In order to qualify for this scheme, the entrepreneur had to meet these conditions. One of these conditions is that no dividend may be paid at the time of the deferral. In addition, no bonuses may be paid.
As of April 1, 2022, all new payment obligations must be met again
As of October 1, 2021, the special deferral of payment expired. As a result, taxpayers who had special deferrals due to the corona crisis must again meet all new and current tax payment obligations. A new payment obligation exists if a tax return is filed on or after April 1, 2022. For example, the VAT return for the first quarter of 2022 falls under this, as this return for this quarter must be made after April 1. This also applies to the wage tax return for the month of March.
Tax debt payment schedule effective October 1
As of October 2022, the tax debt deferred as a result of the special deferral scheme must be repaid. For this purpose, a payment scheme has been established. Entrepreneurs pay off the debt in 60 monthly equal installments. After these 60 months (on October 1, 2027), the tax debt must be completely repaid. A question that arises is whether during this payment scheme there are still conditions that the entrepreneur must observe, such as the condition that no dividend may be distributed.
May dividends be paid during the payment plan?
The Decree on Emergency Measures in the Corona Crisis states that no bonuses and dividends may be paid until the moratorium is withdrawn. So the question is when can it be said that the deferral has been withdrawn. On October 1, 2021, the deferral was withdrawn and on October 1, 2022, the repayment of the debt begins.
Taking this into account, dividends should be allowed to be paid again. However, it seems that the State Secretary thinks differently about this. In the latest version of the decree it has been included that the previously mentioned conditions apply in full during the payment scheme* and that no bonuses and/or dividends may be distributed.
If the conditions are not met, the payment arrangement may be terminated
If the entrepreneur does pay dividends or bonuses or does not meet the other conditions, the Recipient can claim that the conditions have not been met. The payment scheme may then be terminated. It follows from the Parliamentary Letter Monitoring fiscal measures in connection with covid-19 that if the conditions for the payment scheme are not met, the entrepreneur will be contacted to see if there are possibilities to meet the payment scheme after all. The entrepreneur therefore does not have to be afraid that without consultation the entire tax debt will suddenly have to be repaid.
Need advice from a tax lawyer in Rotterdam?
Do you have questions about the implications of the payment plan? If so, please contact our tax attorney David Harreman.
* Decision on emergency measures for the corona crisis, Decision of the Secretary of State of January 26, 2022, no 2022-20850, Government Gazette 2022-1588, par 3.1