Enterprise and Government2022-06-23T09:57:42+00:00

Enterprise and Government

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Entrepreneurship and Government

For entrepreneurs, the government is an important party. In your business operations you have to deal with laws, regulations and government decisions, both at the national and local level, often with complex content. The relationship with the government has its pitfalls and obstacles.

The playing field with the government is often difficult for entrepreneurs to oversee, because of the multitude of measures, and to see through, because of the density and complexity of measures that can follow in rapid succession. This can increase the risk of enforcement by the government. Especially in environmental law, this is a concern for entrepreneurs.

In addition, contracting with the government often involves special rules of the game, which are usually not an issue in business-to-business relationships.

Moreover, in legal disputes with the government there are often short time limits within which the entrepreneur must take action.

Most entrepreneurs will at some point need to call upon specialist knowledge in the areas of enforcement, environmental law, procurement, permit procedures and/or administrative litigation in objections and appeals. LVH Advocaten has extensive knowledge and expertise in these areas.

Advising

Our lawyers can advise you in contractual matters with the government and in matters concerning government decisions. It is important to determine your legal position and strategy in time in matters with the government, given the often short time limits for taking action against an adverse government decision. This can prevent time-consuming and expensive procedures.

In daily practice, our lawyers advise and litigate in matters concerning zoning plans and environmental permits, tender procedures, applying for or contesting a permit or subsidy, disputes or conflicts with the (local) government, objections, compensation or planning compensation.

Litigating against the government

Should legal proceedings be necessary, our lawyers can defend your interests against the government. For example, our lawyers have extensive experience in objections and appeals against enforcement decisions, decisions to grant or refuse permits and the establishment of zoning plans.

Sometimes an entrepreneur is in danger of suffering serious damage as a result of governmental action and the normal course of legal proceedings cannot be awaited. LVH Advocaten is an expert in conducting emergency proceedings, such as interim relief proceedings against government decisions and interlocutory proceedings against decisions of the contracting authority.

GESPECIALISEERDE ADVOCATEN

Dit zijn onze advocaten die gespecialiseerd zijn op dit gebied.

Closure of houses in case of drug discoveries

Closure of houses in case of drug discoveries

Is the door of Damocles unlocked? New developments in case law indicate that homes can be closed down less quickly due to the discovery of prohibited substances.

For unknowing landlords and tenants it is a shock. In the early hours of the morning, the police raid a building. The house turns out to have more uses than known to the landlord. Among the unhealthy inventory carried out are scales with remnants of suspicious white powder, adulterants, packages of greaseproof paper and bundles of cash. One of the residents goes with the police. The rest are left with the proverbial debris.

The Damocles Act

The landlord and tenant find themselves in the shadow of the Damocles Act. They are threatened with closure for a long period of time, in which it does not matter much whether they have participated in the delinquent practices.

Viewed through legal eyes, the legal mechanism of Article 13b, paragraph 1 of the Opium Act comes into play. According to this provision, the mayor may impose an administrative order if prohibited narcotics are sold, delivered or supplied in a dwelling, room or associated premises. This order will usually amount to closure for a number of months.

In 1999, this authority was given to the mayor. The instrument was aimed at “premises accessible to the public”. In other words, it was about combating the trade in drugs in the catering industry and business premises. A powerful weapon that the government could take up to guard the public order, but within clear limits; an administrative tool, meant to be applied in extremis. The legislator’s idea was that by closing down a building, it would become known as a drugs den, thus eliminating the ‘loop’ to the building and removing it from the drugs circuit.

Meanwhile, almost all Dutch municipalities have a so-called Damocles policy. This policy generally regulates the circumstances under which the mayor will decide to close and the period for which the closure will be imposed, given the nature and gravity of the violation of the Opium Act.

Intensive use of the Damocles policy

When it was introduced, it was not expected that the instrument would be added to the standard administrative repertoire. Over the years, the legislator has stretched various enforcement powers far beyond the limits for which they were created.

In 2007, for example, the power to close was extended to include homes. From 2019, the power can also be used if criminal preparations have taken place in the premises, even if these have not yet led to trading.

Mayors have started to use the instrument with increasing regularity. In doing so, the original intentions of the legislator have been lost sight of with the passage of time.

Lack of counterweight

The system of the law is also vulnerable. An order to close is imposed and can subsequently be executed without the approval of a judge. The lawfulness of a closure will only be judged after the order has been issued – the residence may already have been vacated. A landlord or occupier who wants to prevent the closure pending the court’s ruling will have to rush to the court to ask for a suspension of the closure order. A suspension has not been granted very often in recent years. Research by the University of Groningen showed that even such a temporary injunction was rejected in 4 out of 5 procedures.

In the minority of cases in which an order was suspended by the preliminary relief judge, or when the mayor postponed implementation of the order until after the outcome of proceedings on the merits, the closure was almost always upheld. If the court overturned the closure, it was usually a stay of execution – usually because of a flaw in the mayor’s reasoning for the closure. An amended or new decision could then impose the order with an improved justification, after which the closure remained in place.

The rarity of successful proceedings against residential property closures is the result of the administrative courts’ detached approach.

Distant judges

In proceedings about Damocles closures, the administrative judge’s courtroom seemed to serve as an annex to the mayor’s office. The substantive assessment of the closure orders was not very extensive and usually proceeded as follows.

First, the administrative judge determined whether the mayor was authorised to impose an administrative order under article 13b of the Opium Act. This determination is made quickly, if there is no discussion about the discovery of prohibited goods under the Opium Act.

Then followed the question in which the interests of those involved should be considered, namely whether the closure is reasonable. First, it was considered whether the municipal policy was reasonable. Then it was considered whether the mayor had considered the circumstances of the case. Finally, the administrative judge assessed whether the mayor could reasonably decide to impose the charge.

The assessment usually concentrated on the question of whether the mayor had acted contrary to the prohibition on arbitrariness. The excessiveness of a closure had to be extreme and flagrant for the judge to blow the whistle on the mayor.

In doing so, the administrative judge displayed an art of reasoning in which a certain amount of legal scholarship could be heard, but in which not much social awareness could be discerned. In essence, the court followed its line of reasoning in the wake of the legal mechanisms of the Opium Act, without carrying out a full review of its own. In concrete terms, this came down to the following.

In the law, a quantity of half a gram of hard drugs, or 5 grams of soft drugs, is regarded as stock-in-trade. If any quantity above this legal limit was found, the judge considered the conclusion that the house must have served as a trading post appropriate. In doing so, the judge easily overlooked the rather essential difference between an inhabitant and a dwelling. Common sense suggests that the presence of one gram of hard drugs does not make a living space a commercial space.

Nevertheless, the Administrative Jurisdiction Division of the Council of State found the order to close reasonable once the threshold of the trading stock in the Opium Act had been passed. Even very small findings of just over half a gram of cocaine or heroin justified a closure order. In essence, the administrative judge reduced his control task to legitimising an administrative closing down reflex.

À propos: judging consistently, this logic would have made many a home in Amsterdam’s ring of canals, as well as many an office on the Zuidas, eligible for closure. To the blessing of their population, these notable regions do not come within the enforcing sights of the mayor.

The position of the landlord

The owner of the premises will be inclined to cooperate with the municipal authorities. As the landlord of a “drug” premises, he will not want to run roughshod over the authority, on top of the discouraging effect of judicial distance. This tendency is reinforced by a simplification of the possibility of dissolving the lease. Pursuant to Article 7:231 paragraph 2 of the Dutch Civil Code, the lessor has the option of dissolving the lease contract out of court after an order to close has been issued. Thus, the termination of the lease becomes in fact the private-law final element of an administrative enforcement offensive.

Incidentally, the legislator dropped a striking stitch in the latest adjustment of the legal regime. The mayor’s extended authority to close on account of punishable preparations has not been given a counterpart in the regulation of the authority to dissolve the lease by the lessor. As a result, the lessor can terminate the lease agreement out of court if narcotics are found in the residence, but not if equipment is found that serves to prepare the production, transport or trade. Apparently, the legislator forgot to include a further reference in article 7:231 of the Civil Code. Due to this legislative error, the lessor has to go to court in that case. An ill-considered legislator has thus driven the lessor into the position of civil enforcer on the one hand, but on the other hand has provided him with an inadequate set of instruments.

The position of the tenant

After closure, tenants are usually not allowed to return to the property. In addition, tenants may end up on a ‘black list’, which means that for a number of years they are not eligible to rent from a housing corporation. Little attention is paid to the question of whether a tenant has actually participated in prohibited acts committed by a co-occupant.

This raises the question of whether the tenant is not being punished by the closure. This has also been argued several times in court. The line of reasoning is that a punitive measure must be imposed by the judge and not by the mayor, with due regard for the guarantees of a fair trial. When this argument is made, the administrative judge draws a line between a restorative sanction and a punitive sanction. According to the court, the closure may only be aimed at ending and preventing violations of the Opium Act if it is to be a recovery sanction. If the closure is more far-reaching and thus serves to add to the harm, it is a criminal sanction. Whether the closure serves to add suffering must be judged according to the criteria laid down in the case law of the European Court of Human Rights. The question of principle often revolves around two decisive elements: the nature of the violation and the severity of the measure.

Invariably, the Administrative Law Division concludes that there is no question of a criminal sanction. The reasoning is not always convincing. Usually, the reasoning is that the closure is aimed at ending and preventing a violation by destroying the reputation of the house as a drugs den. According to the Administrative Jurisdiction Division, this argues against the assumption of a punitive character. In addition, the severe consequences of the closure do not in themselves make the measure punitive, since the aim is to destroy the reputation of the dwelling as a drugs den and to prevent repetition. With this circular reasoning, the administrative court in 2018 further locked the door to effective legal protection.

The door is unlocked

At the beginning of 2022, there seems to be a drastic change of course. An accumulation of excesses in the enforcement of legislation has caused a shock in the chambers of state councils of the Division. A rude awakening has brought the highest administrative court to the realisation that its supervisory role has been neglected. This insight has also had repercussions in the domain of Damocles.

In its judgment of 2 February 2022, the Administrative Law Division distanced itself from the formula that the mayor could reasonably impose the order to close. The question is no longer whether the mayor acted arbitrarily. The Administrative Jurisdiction Division now requires the administrative courts to consider the question of whether the closure is proportionate.

From now on, the court will also look more closely at whether the closure is effective in restoring public order and protecting the residential and living environment. Following on from this, the court must examine whether there are less strict measures that can achieve the same objective. If a found trading quantity is not traded from the residence, the need for closure will not be assumed so quickly.

Furthermore, the closure will have to be more attuned to the actual situation than was previously the case. The culpability of those involved is important here. The absence of any involvement of a co-occupant in a violation of the Opium Act may mean that the mayor is not allowed to use his authority to close the home. In general, the landlord and the resident are required to exercise some supervision over what happens in the house, but the court notes that there are limits to the supervision that can reasonably be expected, partly depending on the living situation. If the mayor makes use of his authority to close a residence, he will in any case have to properly substantiate which specific reproach is made to the resident affected by the closure.

Finally, the closure must be proportionate to the seriousness of the consequences. Emphasis must be placed on the fact that the closure is an infringement of the right to respect for one’s home and private life. Financial damage, for example due to the costs of replacement accommodation, or the fact that vulnerable residents are involved, must also be considered.

New consideration for the mayor, the tenant and the landlord

The case law thus offers appropriate room for challenging an order to close. For residents affected by a closure order who were not involved in prohibited practices, the closure no longer seems to be a fait accompli. This is likely to lead to a more nuanced use of the power to close, with mayors applying their Damocles policy in a less implacable manner.

It is also likely that tenants will be less inclined to accept closure, as the new assessment framework seems to offer them a real chance in cases where drugs have been found belonging to a co-occupant through no fault of their own.

Moreover, landlords are able to make their own actual assessment. Dissolution no longer needs to be automatic. The same applies to the usually docile attitude towards the municipal authorities. Now that the possibility of challenging a closure order has been broadened, it is likely that landlords will more often stand up for their interest in keeping a property ‘open’.

Given the recent date of the latest developments, it is premature to draw firm conclusions about the future. However, the expectation can be cautiously expressed that a better balance is in the making, between preventing urban decay on the one hand, and protecting citizens against enforcement excess on the other. In any case, we will continue to follow the case law in the Damocles’ domain closely.

Ben van Nieuwaal

+31 (0)10 209 27 75
vannieuwaal@lvh-advocaten.nl
(more…)

Use of a contiguous site in violation of the zoning rules

Old buildings are increasingly getting a new function. An old school building becomes a restaurant in retro style, a dilapidated mansion revives as a hotel and an abandoned office building gets e and new life as a student complex.

Such a transformed building often still includes a disused piece of land. Years after a building has been given a new function, the need may arise to use the adjacent land. The old schoolyard could provide space for a summer terrace, the hotel wants a more spacious parking lot in the garden of the old mansion, the student complex could use some bicycle storage on an unused driveway.

Different planning rules may apply on the adjacent land, because the zoning plan assigns a different purpose to the land than to the building. In the past, a permit may also have been granted in favor of the transformation to deviate from the purpose of the building, but not of the adjacent land. Thus, unpleasant complications can arise.

Permit for conflicting use as a contiguous site

The opaque accumulation of rules and exceptions that we know as environmental law brings counsel if one knows where to look. The Environmental Law Decree, in the second appendix under the fourth article, gives a list of activities for which a permit may be given for activities that conflict with a zoning plan. The ninth section of that article mentions the use of land adjacent to a building in violation of the zoning rules applicable to that land.

The extensive procedure with the decision period of 6 months, which is the starting point for permits in activities in conflict with a zoning plan, does not have to be gone through in this case. The shorter, regular procedure is applicable, with a decision period of 8 weeks. This also means that if the application is not decided on in time, the requested permit is given by operation of law. In this way, the land near a building can be used for a purpose that deviates from the zoning plan, without having to undergo a rigid process of planning decisions.

Conditions for permit

This possibility of authorization has been curtailed within strict limits. The legislature and courts strictly enforce the requirement that the land for which the permit is sought is actually adjacent to a structure. This is how the owner of a piece of land, with a house, a garden and a garage on it, found himself. He applied for a permit to extend the garden to a strip of land behind the garage. This was rejected because the strip did not border directly on the house.

In addition, the change of use of the adjoining property must serve only the use of the structure to which the property adjoins. A terrace at the restaurant is sufficiently related to the function of the building and will be considered to serve the use for the restaurant destination. Similarly, parking spaces will be considered to serve the use of the hotel zoning and bicycle storage will also be embraced by the residential zoning.

But does the desired use serve, for example, to provide space for a new activity that the owner has added to his business, then the slower, more laborious path of the extensive procedure will have to be followed to obtain permission to deviate from the zoning rules.

So here too the inevitable ifs and buts apply. Nevertheless, the regulation deserves attention. Should you encounter complications because the desired expansion of a permitted activity in an adjacent building clashes with the zoning on the adjoining property, it is useful to consider whether an appeal can be made to this regulation.

This article was written by mr. D.C. van Genderen.

Information

Are you looking for legal advice? Then feel free to contact us. You can do so by phone, email, or by filling out the contact form. If you have any questions, please call LVH Advocaten on our general number 010-2092777.

Deferral of tax payment during corona

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

The end of the Wob and the arrival of the Woo in a nutshell

Public access to government information

As of May 1, 2022, the era of the Open Government Act (“Wob”) has come to an end. After years of serving as the legislative framework for the right to government information, the Wob has been replaced as of May 1, 2022 by a new law, which entered into force under the name of the Open Government Act (‘Woo’).

The departure of the Wob will not cause the public in need of information too much heartache. Not infrequently the Wob proved in practice to be a legal “shield” behind which a closed government evaded or tried to evade public scrutiny. In administrative practice, the Wob has therefore not been able to fully live up to the promise of a transparent government. The courts have regularly had to confirm or enforce the citizen’s fundamental right to information in judgments.

Purpose of the de Woo

The Woo has an ambitious goal. The new regime is intended to initiate an open administrative culture and a more accessible government apparatus. To put this intention into practice, the Woo provides for several changes – of a more or less substantial nature – compared with the old regime (Wob). First of all, there is a shift in emphasis in the approach to government information; an active disclosure obligation will apply to a large group of information types. For types of information whose disclosure must be requested, the Woo procedure shows some innovations of a procedural and substantive nature. In addition, the Woo modifies on a number of points the assessment framework used by the administrative body to decide whether information should be disclosed and, if so, in what form. We discuss the most relevant changes below.

Starting point of the Woo: active disclosure

Under the Wob, the so-called Wob request was the focal point. The duty of disclosure only took shape if a request was made. Beyond that there was only a best-efforts obligation to disclose information of one’s own accord, compliance with which could not be enforced and which therefore left the administrative body free to decide at its own discretion. Article 3.3 of the Woo does away with this when it comes to information belonging to one of the categories mentioned there. If an information type falls into one of these categories, the administrative authority must make the information public of its own accord.

In part, this relates to information that administrative bodies already tend to disclose, such as decisions of general application, generally binding regulations and administrative reports. However, the Woo goes further than is usual in current practice, for example by stipulating that draft decisions on which external advice has been requested must be made public, as must the external advice and the accompanying request for advice. Also of importance is that investigation reports about the performance of an administrative body’s duties will be subject to the active disclosure obligation. At least as valuable is the obligation to actively disclose a series of types of decisions, such as, and perhaps most important for practice, the environmental permit.

The information must be sufficiently accessible to the public. Article 3.3 of the Woo regulates that the relevant documents are made accessible through an online platform. The platform, called PLOOI, is a central location where all public government information should be able to be consulted by the public.

With this duty of active disclosure, the Woo aims to set in motion a cultural change. Administrative bodies will have to keep track of information and organize it so that it is regularly made public.

Disclosure on request under the Woo

Anyone can request an administrative body to disclose information, without the requester having to declare an interest. This does not change with respect to the Wob.

The Woo brings the formalities concerning the submission of requests into line with the requirements of the digital age by explicitly providing that a request for information may be submitted electronically. Although submission by electronic form or email is now quite common, the Wob allowed administrative bodies to demand an old-fashioned written submission. Consequently, various administrative bodies continued to cling to a dated formality. The Woo will put an end to this.

If the administrative body intends to grant a request, the disclosure is automatically suspended if a third party wants to prevent it and requests a preliminary injunction against this from the administrative court. Pursuant to Section 4.4, subsection 5, of the Woo, the suspension lasts until the preliminary relief judge has ruled or the request has been withdrawn. Suspension was already common practice under the Wob, but was not prescribed by law. Because the internal coordination within the government bureaucracy sometimes failed, publication was sometimes a fait accompli. The new provision in Section 4.4 guarantees the protection of third parties more explicitly.

In addition, the procedural differences between requests for environmental information and other information in the Woo have been eliminated as far as possible. For example, the deadline for responding to an environmental information request has been made the same as the deadline for any other information request.

Grounds for refusal under the Woo

The Woo maintains most of the grounds for refusal from the Wob in the assessment framework for information requests.

To this, the Woo adds a new ground for refusal, according to which the administrative body can withhold the disclosure of information if the interest of doing so is outweighed by the protection of the environment. For example, it may be necessary not to share with the public information about reproduction areas and the habitat of rare species. The Woo also stipulates that disclosure can be refused if the interest of disclosure does not outweigh the proper functioning of the State, other public law bodies or administrative bodies. In practice, this new ground for refusal amounts to a statutory elaboration of existing case law, which has been applied for years in assessing whether the administration was right to refuse a request for information in order to prevent disproportionate harm to the government.

Under the Wob, the prevention of disproportionate harm or advantage was a ground for refusal so widely used that it degenerated into an all-purpose excuse for withholding information. The Woo is intended to change this. Information may no longer be refused on the grounds of disproportionate benefit to those involved or third parties, as was the case in the Wob. In addition, if the environment is not at stake, information may only be refused on the grounds of disproportionate harm to those involved or third parties in exceptional cases. The ground for refusal may therefore no longer be used as a “catch-all” provision.

In determining whether information should be refused because of competitive sensitivity, the Woo provides for a minor change. Environmental information that has not been provided to the government in confidence is no longer covered by this ground for refusal.

Abuse of the Woo

The Wob had its excesses. On the far side of the closed government, stood the private querulant or opportunist, who abused the Wob as a means to stall and harass the public administration with an endless influx of information requests. This was already a reason for the legislator to break the link between the Wob and the Late Payment and Appeal Act in 2016. The legislator added an anti-abuse provision in the Woo. If it is evident that the requester’s objective in the context of the Woo is other than to obtain public information, or if the request does not concern an administrative matter, the administrative body may decide to ignore the request altogether. Practice will have to show how administrative bodies will interpret this anti-abuse provision, and more specifically the “obviousness”.

Expectations of the Woo

It is not the intention to continue the existing Wob practice under a new banner. The legislator has a structural change in the handling of information in mind. Ultimately, a certain balance must be struck between transparency and the careful handling of other public objectives. The approach of the Woo seems realistic in this respect, by emphasizing shifts in emphasis and not striving for lofty reforms.

Within 5 years of the Woo’s entry into force, the Ministry of the Interior and Kingdom Relations will share an evaluation of the law with First and Second Chambers of the States General. This will have to show the extent to which the objectives of the new law have been achieved.

Information

This article was written by Ben van Nieuwaal and Daniël van Genderen of LVH Advocaten. If you have any questions about this article, please contact us at our general number +31 10 209 27 77.

Request for debt restructuring and Corona: the tax collector thinks along

Request for debt restructuring and Corona: the tax collector thinks along

Requests for restructuring of tax debt

Until further notice, the Tax Authorities will approach requests for restructuring of tax debts with a flexible attitude. This applies in particular to requests from entrepreneurs whose businesses are fundamentally sound and who have been affected by the Corona crisis. For these entrepreneurs, the generous corona deferral policy may prove to be of no avail. But other entrepreneurs are also eligible for the more flexible approach. The flexible approach applies to all tax debts.

What does the flexible approach entail?

An important condition for the restructuring of tax debts is the existence of a viable enterprise. Whether this is the case must be assessed by an external party deemed suitable. This party should be the bank, an auditor or a restructuring expert. The assessment will include a forecast of the capacity to meet the costs of running the business, (re-)financing the business and the company’s remuneration. In addition, the forecast must show that the costs incurred during the reorganisation can also be paid. In some cases, the recipient may investigate the viability on his own initiative.

Entrepreneur cannot pay the tax debt

In addition to the fact that a viable enterprise must be present, it must also be shown that the entrepreneur is not or not fully able to pay the tax debts. Not even with the help of the generous deferral scheme in connection with the corona crisis. It should be noted, however, that the tax debt for which the restructuring is requested may not have arisen as a result of serious culpable acts or omissions on the part of the entrepreneur.

What is a debt restructuring proposal?

There is a reorganisation proposal. This means that unsecured creditors must also agree to the restructuring of the debts to those creditors. Only when that condition is met and the offer to the recipient is substantial and at least double the percentage offered to the unsecured creditors, can one speak of reorganisation of the debts.

How can the reorganisation be requested?

A request for debt restructuring can be submitted to the tax authorities using a prescribed form. A request will only be processed if it is actually complete. If the request is not complete, the tax collector will give the applicant 90 days to complete or rectify it.

What does a request for remediation comprise?

A complete request for restructuring includes, in addition to the prescribed form, a positive external assessment of the viability, an agreement from all creditors, a motivated statement from the entrepreneur about the cause of the financial problems and a liquidity forecast for the next 24 months. If the entrepreneur is also included in the COVID-19 deferment scheme and the associated payment scheme, the forecast must show that this payment scheme will also lead to the full payment of the tax debts.

When will a request for restructuring be granted?

A complete request will be assessed by the recipient, whereby the recipient may also examine the viability of the enterprise. If all conditions are met, the recipient will grant the application. The tax collector will reject the request if there is evidence of bad faith on the part of the taxpayer. In addition, the tax collector will reject the request if during the application no new obligations have arisen, the required declarations have not been submitted, there are multiple taxpayers, the taxpayer has been granted a moratorium on payments or is in a state of bankruptcy, and/or the Dutch Natural Persons Debt Rescheduling Act (WSNP) applies to the taxpayer.

In addition to a request for restructuring for a company that is being continued, the tax collector can also process a request for restructuring if there is a desire to terminate the company.

Granting the request for reorganisation

If the request meets the conditions and the recipient agrees with the request, the recipient will grant the reorganisation by means of a decision. This decision includes the condition that the reorganisation amount must be paid in one lump sum. In addition, in specific cases, it is possible to request a payment scheme in which the agreed amount is paid in 12 equal monthly instalments.

When can the decision be revoked?

The decision to grant remission is a conditional decision and can be revoked if it appears that the entrepreneur provided incorrect information which he knew or should have known was incorrect, if the entrepreneur is declared bankrupt, is granted a suspension of payments or is admitted to the WSNP. In addition, the decision can also be withdrawn on the basis of other conduct on the part of the taxpayer. For example, not meeting the tax obligations and not complying with the payment scheme for the agreed amount.

The tax collector can, however, give the entrepreneur the opportunity to rectify the shortcomings within a certain period of time.

In the end, a nice arrangement has been made whereby the recipient has the motto: in case of doubt, grant. Although collecting in case of doubt is not always the most sensible thing to do, at times it may be really necessary to try and avoid bigger problems.

Need advice from a lawyer in Rotterdam?

Do you have any questions about the collection rules regarding the tax debt arising from the corona postponement? Then please contact our lawyers Rob Steenhoek and David Harreman.

David Harreman

+31 (0)10 209 27 65
harreman@lvh-advocaten.nl
(more…)

Daniël van Genderen

+31(0)10 209 27 75
vangenderen@lvh-advocaten.nl
(more…)

Wat vinden onze cliënten

We hebben al enkele jaren zeer goede ervaringen met LVH advocaten. Het kantoor kenmerkt zich door een gedegen Rotterdamse down-to-earth werkmentaliteit met daarbij een uitstekende kennis van zaken. Bij onze laatste samenwerking heeft Mr. R.C. Steenhoek ons als adviseur bijgestaan tijdens de afwikkeling van een faillissement. Door zijn ruime ervaring als curator is mr. Steenhoek zeer deskundig in deze trajecten. Hij is zeer toegankelijk, weet de belangrijke details te benoemen, denkt vele stappen vooruit  en komt met een duidelijk plan van aanpak. Tijdens de afwikkeling van het faillissement met de curator heeft mr. Steenhoek ons voortreffelijk vertegenwoordigt. We zijn zeer tevreden over het behaalde resultaat en we zijn ervan overtuigd dat zonder zijn expertise we dit niet op deze wijze hadden kunnen afhandelen.

P.E. van Erk

In 2019 en 2020 hebben wij LVH Advocaten benaderd voor een advies om de zaak op een zorgvuldige en deskundige wijze te beëindigen. Dit is volledig op een praktische en binnen een zeer korte periode opgelost. Hij had altijd zijn volledige aandacht voor mijn verhaal. Het is op een zeer nette manier afgehandeld. De samenwerking was perfect!

Met alle dank aan de heer Steenhoek.

Ton Hameeteman

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