Temporary relaxation of certain tax provisions

The Dutch cabinet announced additional measures to support business owners. The following temporary tax relaxations are announced. 

  1. Sole traders remain entitled to the regular business tax credits, even if they spent less hours on their business. The minimum annual 1225 hours spent on your business required to obtain a number of business tax credits are recognized by the Dutch tax office even if you actually spent less time on your business in the period 1 March - 1 June. The tax office recognizes at least 24 working hours per week as legitimate working hours for the business, irrespective if less time actually was spent on the business.
  2. DGA (director-owner). The mandatory minimal director-owner salary (DGA salaris) of €46,000 (2020) can be temporarily reduced in proportion to the realized revenue loss.
  3. DGA (director-owner): Business owners with a limited liability company (such as a B.V.) may reduce their 2019 corporate profit with an impairment or loss recognized in the current fiscal year. Such an adjustment in the financial statement may not reduce a profit into a loss.
  4. Employers may allocate a larger portion of their payroll expenses to tax-free reimbursements for their employees. The one-off unbound allocation (Vrije ruimte) ceiling in the work-related costs scheme (Werkkostenregeling) is raised from 1.7 to 3 percent over the first € 400,000 of employer's payroll expenses. This allows an employer to provide employees with an extra item (present or otherwise extra benefit in kind), free of tax.