News item | 08-09-2022 | 16:40
It will be possible for some entrepreneurs to extend the repayment term of the corona tax debt from 5 to 7 years. This concerns essentially healthy companies with a debt of more than €10,000. The government recognizes that some SMEs with tax debts are in dire need and wants to do this to give healthy companies a breath of fresh air by extending the repayment term. It will also be possible for entrepreneurs to take a one-off payment break of three months and to pay quarterly instead of monthly.
At the request of the House of Representatives, the cabinet looked into whether and how it was possible to extend the repayment term from 5 to 7 years. With this extension, the government wants to help companies that are financially healthy and that are dealing with temporary repayment problems. The government does, however, attach conditions to the extension to prevent companies that do not need the extension from making use of it. Three groups are not eligible for additional granting of the payment scheme:
- Companies that have taken advantage of the tax deferral, but are in good financial shape.
- Companies that have built up a high (corona) tax debt, but have made little or no profit in the years prior to corona.
- Companies with an outstanding (corona) tax debt lower than € 10,000.
For the extension, entrepreneurs must submit a request to the tax authorities. This must show that the debt cannot be repaid within five years, but can be repaid within seven years. The Tax and Customs Administration will assess the request on the basis of the information provided. For a debt from €50,000, more substantiation is required than for a debt between €10,000 – €50,000. A request can be requested throughout the term of the payment arrangement.
The extension of the payment arrangement means that part of the total outstanding debt will be repaid a maximum of 2 years later. Last spring it was already announced that it is taken into account that 30% of the total debt cannot be repaid. The extension of the payment arrangement is not expected to increase or decrease this percentage. The consequences for the budget are therefore limited.
Before the summer, it has already been mapped out which problems entrepreneurs experience when repaying their corona tax debt, via internet consultation and through conversations with affected sectors. Two possibilities emerged from this to offer entrepreneurs more flexibility in repayment. Paying quarterly instead of monthly and making it possible to take a one-off payment break of three months. This can help, for example, for companies with a strongly fluctuating turnover due to seasonal influences. To make use of this, entrepreneurs must submit a written request showing the repayment problems.
From 1 October this year, entrepreneurs will start paying off the tax debt they have built up during the COVID-19 pandemic. This temporary postponement of tax payment was part of the corona support package. Currently, 269,000 entrepreneurs still have an outstanding tax debt of more than 19 billion euros. In total, about 400,000 entrepreneurs have made use of the temporary postponement. Some of the entrepreneurs who have taken advantage of this tax deferral have already partially or fully paid off their debt. As a result, 28 billion of the original amount of 47 billion euros has already been repaid.