For entrepreneurs there has been much to do about Corona support measures the Dutch government has implemented for entrepreneurs in the wake of the Corona crisis. Naturally this is no different for foreign entrepreneurs, which is our focus group. The first question which would likely come to mind for you is whether or not you, as a foreign national, are eligible for appealing to one or more of these measures. To answer this I can be brief, there is in this sense no distinction between a foreign legally residing national and a Dutch or EU citizen. Good new so far. Many of our clients are being advised by their accountant to make use of these facilities. However, I’m afraid it is not as simple as this. Making use of certain the support measures could have consequences for your residence permit.
There seems to be in contradiction, on one hand you can enjoy the benefits of Corona support measure on equal terms as a Dutch citizen, but on the other hand that it could have consequences for your residence permit. The answer lies in the legal fact that except for the permanent residency and the asylum status, all residence permits have the general condition that one may not appeal to our public funds (in Dutch: openbare middelen). It says so on the back of the residence card: “een beroep op openbare middelen kan gevolgen hebben voor het verblijfsrecht.” This means that applying for a social welfare benefit (in Dutch: bijstandsuitkering) may cause the residence permit to be revoked. The question you should ask is if the specific measure you are eligible for is an appeal to public funds. I will address this with regards to the different types of measures below.
Tozo (tijdelijke overbruggingsregeling zelfstandig ondernemers: temporary bridging facility self-employed entrepreneurs)
This facility offers entrepreneurs a replenishment of their income to the sustenance minimum which is currently €1653,65 gross per month. For instance, if your monthly income has dropped to €1000, then you can claim €653,65. This facility is valid for three months and starts March 1st and can be obtained retroactively.
This available for persons who:
- Is at least 18 years old and not older than 67.
- Has been registered as a business at the chamber of commerce prior to March 17th (at 18:45).
- If the business was started prior to January 1st 2020 then he/she must have spent at least 1225 hours work annually in their business, or an average of 23,5 hours per week.
- This is an online tool with which you can check your eligibility for the Tozo facility.
Under this scheme it is also possible to apply for a business loan of maximum €10.517 from your municipality. This loan must be paid back within three years with an interest of 2%.
For more information on the Tozo check the Dutch government website.
Of the all measures this so-called Tozo facility is the most likely to have consequences for the residence permit because it is basically a temporary application for a welfare benefit, which in general will have consequences for the residence permit. For the loan it is also unclear if this is seen as making use of the welfare system. Is seems unlikely as this is not a grant but a loan, but it will have a negative effect on your company capital. For Japanese and US entrepreneurs who are required to keep their company capital at €4.500 in the plus this could give problems.
We have already contacted the IND on the Tozo and asked their position. We have been informed that this is currently under review by their policy unit and the IND hopes to make their position known shortly. Until then we recommend you refrain from making use of the Tozo.
TOGS, Tegemoetkomingsregeling ondernemers getroffen sectoren: allowance for entrepreneurs of stricken sectors COVID-19
This facility entails a onetime grant of €4.000 for entrepreneurs who have directly been hit by the government measure to curb the spread of COVID-19. The grant is intended to help these entrepreneurs cover their fixed costs such as rent of business location.
The facility is intended for businesses which have directly been affected by the government measures. Obvious examples are restaurants, bars and hair dressers. You can find a full list of sectors which fall under this scheme on the website of RVO.
The three most important criteria for eligibility for the TOGS are:
- No revenue as a direct result of the COVID-19 measures.
- You have fixed expenses such as rent.
- External/ outside the home infrastructure
More information on the TOGS can be found on the government website.
Unclear is if this will be seen as making use of public funds. On one hand this not a welfare benefit, but on the other hand it is a grant from the government, ergo you bill be an expense to the tax payer. Until the IND give clarity on how they view this, we recommend you refrain from appealing to this facility.
Delayed payment of owed taxes
Another measure to assist entrepreneurs in need is the option to ask the tax service for a delay in owed taxes. This entails all forms of tax an entrepreneur deal with from income tax, VAT’s, environmental taxes and everything in between.
For all taxes a delay of payment for three months is given quite leniently. Delay’s longer than three months will require proof that there is a considerable decrease in revenue.
You can check the government website for more information on this scheme.
Our opinion is that it is unlikely that this will be considered appealing to public funds. This involves taxes owed as a result of entrepreneurial activity for which one asks for a delay in payment. Ergo payment will follow at some point in the future only later than initially required.
NOW; Tijdelijke noodmaatregel voor overbruging werkgelegenheid; temporary bridging measure employment
By far the most extensive and complicated corona measure is the NOW. The scheme offers an allowance to employers with people on the payroll. If an entrepreneur expects to suffer at least 20% loss in revenue as a result of the Corona crisis he/she can have up to 90% of the labor costs compensated by the government.
This measure forms likely the bulk of the government aid package. The implemented legislation entails calculations on how loss of revenue should be calculated and how one should calculate the expected compensation of labor costs. For more information you can consult the government website. In the light of the complexity of this facility we recommend you seek expert financial and legal advice. Our team can bring you into contact with such experts should you need it.
If this could have consequences for your residence permit is also highly unclear. You are essentially asking the tax payer to cover, in part, what is your labor costs ergo what is your business expenses. But if this will be considered you personally making use of tax payers money, is not sure. Again, the final word is up to the IND.
For entrepreneurs other than American and Japanese nationals, the general requirement applies that he/she must show that the business is generating an annual gross profit equal to minimum wage (± €21.000 per year). Due to this corona crisis many will not be able to make this benchmark for 2020. The question is also how the IND will view this when time comes for extension.
For questions or assistance with your permit and the corona crisis feel free to call (0031206161487) or email (email@example.com) us. We are happy to help!