Amendments NOW-regulation as per 1 May 2020
On 1 May 2020 the Minister of Social Affairs (Wouter Koolmees) has published a number of amendments to the NOW-regulation (in Dutch: Tijdelijke noodmaatregel overbrugging voor behoud van werkgelegendheid (NOW-regeling)). This article will address these amendments to the NOW-regulation.
1. Deviation from determination revenue decrease at group level
The main rule of the NOW-regulation for groups of legal entities remains unchanged, namely that the revenue decrease of the entire group is the basis for the determination whether the companies are eligible for subsidies under the NOW. After the amendments individual operating companies that are part of a group with less than 20% revenue decrease, now can apply for subsidy under the NOW if they individually have a revenue decrease of more than 20%. The total revenue decrease of the individual operating company is investigated by an accountant.
Conditions application operating companies
To be eligible, the operating company must have its own legal personality. Parts of legal entities, such as individual establishments or a business unit, are not eligible. A group division existing of an intermediate holding company and its group companies can be treated as one legal entity. Minister Koolmees also imposed the following conditions to be eligible:
The applicant operating company is not a personnel company (in Dutch: personeelsbv). After all, in a personnel company the relationship between the total wages and the total revenue achieved is lacking;
There is an agreement between the operating company and the labour unions concerning the preservation of employment. The employer with 20 of more employees must have an agreement on the preservation of employment with the workers’ associations (or, if not present, another employee representation);
No dividends or bonuses are distributed and no own shares are repurchased. Prior to the application, the group (of the applicant operating company) must declare that it will not distribute dividend or bonuses or repurchase own shares for 2020 up to and including the date of the shareholders’ meeting in which the annual accounts are adopted in 2021; and
This adjustment only applies to new applications. Applications submitted before the amendment will not be considered.
Control measures application operating companies
To prevent abuse the following control measures are applicable to the amendment of the NOW-regulation:
No activities are transferred to other operating companies. Other operating companies may not carry out assignments / projects at the expense of the operating company submitting the application;
The revenue decrease is corrected when employees are moved within the group. The revenue decrease is reduced by the total (theoretical) revenue of the moved employees;
The transfer pricing system as used in the 2019 annual accounts (or the most recently adopted annual accounts) is leading for the 2020 measurement period and may not be adjusted; and
A movement in inventories of finished products is attributed to the revenue of the operating company, in order to limit the risk of shifting inventories.
2. Disclosure of NOW data
As a result of the amendments the employer is (automatically) deemed to have agreed that (i) the name and address of the employer, (ii) the advanced subsidy that is provided and (iii) the determined subsidy from the subsidy file can be made public. This degree of transparency in a NOW application is important, for the reason that the subsidy relies heavily on public funds. In addition, the obligation to publish competitively sensitive information is avoided with this arrangement. The possibility of disclosing this information follows from the Wob (in Dutch: Wet Openbaarheid van Bestuur).
3. Information obligation for wage cost subsidy
The Minister has decided, given the current extraordinary circumstances, to accept the double financing of wage costs (NOW and wage cost subsidy) for people with an occupational disability. With this measure, the Minister hopes that further commotion will be prevented among employers who employ people from the target group for job agreements (in Dutch: banenafspraak).
4. Foreign account number
As a result of the amendments an employer with a non-Dutch SEPA bank account number no longer has to provide a Dutch bank account number with the application. Practice has shown that obtaining a Dutch bank account number and supplementing the NOW application within four weeks was virtually impossible.
For other questions and / or further information we kindly refer you to our previous messages the NOW and to your adviser.