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moreAs of 17 March 2020 entrepreneurs could request for special postponement of tax payments. The extension is generally for a period of three months. After this period, the tax authorities will start collecting tax debts due. The term of extension will or has in some cases already expired. Time to act.
End of postponement of payment
If postponement is requested per, for example, 23 March 2020, the term of postponement will end on 23 June 2020. As of that moment the full amount is due. The unpaid amount exists of the additional assessments imposed in the period from 23 March till 23 June. Please be aware that if postponement of VAT is requested simultaneous postponement of wage tax and corporate income tax might have been granted. Postponement for these taxes also expires.
If it is not possible to pay the amount due, extended special postponement could be requested. If the tax authorities did not receive a request for extended special postponement, the tax authorities will inform tax payers timely.
Extended special postponement
To qualify for extended special postponement, a few requirements have to be met. First, the company needs to declare it will not acquire its own shares, will not distribute dividend and will not distribute any bonusses to the board and management over 2020. This declaration will be applicable till adoption of the financial statements of 2020 in 2021. Secondly, information needs to be provided to the tax authorities that proves the payments difficulties exist because of the Corona crisis.
Tax debts less than € 20.000
If on the moment of het initial request of special postponement the tax debt was less than € 20,000, it suffices to add a description of the situation as of that moment and provide, for example, turnover figures or turn over decline.
Tax debt more than € 20.000
If on the moment of het initial request of special postponement the tax debt was more than € 20,000, a more extensive information obligation exists. In that case a third-party expert declaration should be provided. The declaration should contain that, on the moment of the request of special postponement, payment issues exists and that the financial problems are mainly the consequence of the corona crisis. Besides that, a liquidity forecast should be prepared, whereby an expert declares that the forecast is plausible. Last the third-party expert needs to describe which data the entrepreneur provided to the expert for preparing the declaration.
File request
The request for extended special postponement needs to be submitted, in writing together with the required documents, to the tax authorities. It is also possible to use the online tool on the website of the tax authorities. In all likelihood the online form will be available as of 29 June. In principle the request needs to be filed before the term of postponement is expired.
If postponement expires before 29 June, the tax authorities still offer the possibility to make use of the online form. This possibility seems to be chosen from a practical point of view to lower the administrative burden on both the tax payer and tax authorities side. In this scenario It is unclear in what time frame the entrepreneur should request for extended special postponement. Therefore we advise to file the request on or shortly after 29 June.
Third party expert declaration not prepared
If the end of the initial postponement period is near and the third-party expert declaration is not prepared yet, it is nonetheless advisable to file request to be compliant with the set terms. The tax authorities will provide the entrepreneur with a reasonable term to complete the request.
Expiration term extended special postponement
With extended special postponement there is no date set when the postponement would end. In an earlier letter from the government, the State Secretary of Finance indicated that collection of payments will not start before 1 October 2020.
In the letter to the government of 18 June 2020, the State Secretary of Finance indicates to investigate in which ‘responsible’ way the payment extension could be withdrawn and come with a plan for a payment schedule for entrepreneurs.
The state secretary seems to prefer a different payment schedule per specific sector/industry. This way a sector that is more severely affected could make longer use of the extended special postponement and the regulation is more feasible for the tax authorities.
The Secretary of State will explain the action plan further during the summer period.
More information?
For more detailed information and questions please contact your trusted RSM advisor or send an email to [email protected].
Download 'Extension postponement of payment due to the Corona crisis' in pdf.