No Covid debt forgiveness

June 6, 2024



The Dutch government has repeated its stance on COVID-19-related tax debts, underscoring that there will be no blanket forgiveness for these debts. Businesses that have yet to begin repayments are urged to take immediate action to avoid severe consequences. 

Deferred tax payments

As part of the COVID-19 relief measures, the Dutch government allowed businesses to defer tax payments, including income tax and corporate tax. This deferment was a critical component of the support package aimed at helping businesses navigate the financial strain caused by the pandemic. However, since October 1, 2022, businesses have been required to start repaying these deferred taxes, with a general repayment period set at five years. 

Current status of repayments

At the beginning of the repayment period, Dutch businesses collectively owed €19.6 billion to the Tax and Customs Administration. As of April 29, 2024, approximately €10 billion has been repaid, leaving about €9.6 billion still outstanding. Over 150,000 businesses are currently participating in the repayment scheme, with around 75% of these businesses adhering to the repayment schedule. However, over 37,000 businesses are behind on payments, with more than 8,300 having made no repayments at all. Some businesses have even accrued new tax debts. 

Consequences non-compliance

Businesses that fall too far behind on repayments risk having their payment plans unilaterally terminated by the Dutch Tax office. This would require the business to settle the outstanding debt in full within 14 days, failing which, the tax authorities may initiate enforced recovery actions. Between July 2023 and the end of April 2024, around 47,000 payment plans have been canceled, and approximately 2,000 businesses have seen their plans end due to bankruptcy. 

Official statements and assistance

In a recent letter addressing the new repayment figures, acting State Secretary for Finance, Marnix van Rij, emphasized that no general debt forgiveness would be granted. Van Rij urged businesses experiencing financial difficulties to seek assistance. He recommended resources such as the Chamber of Commerce, Geldfit Zakelijk, or local municipalities for support. Van Rij clarified that the Dutch Tax Office lacks the mandate, expertise, and manpower to act as a debt relief agency. 

Debt relief and flexibility

Despite the firm stance on debt forgiveness, businesses can apply for modifications to their repayment plans under certain conditions. Options include extending the repayment period or requesting a payment pause of up to six months. Van Rij highlighted that the Dutch Tax Office prefers keeping businesses within the repayment scheme, as it reduces the administrative burden compared to enforced recovery actions. Consequently, the agency prioritizes requests for repayment plan adjustments and objections from businesses in the repayment program. 

By maintaining a structured repayment approach while offering some flexibility, the Dutch government aims to balance fiscal responsibility with support for businesses still recovering from the financial impacts of the pandemic.