Corona crisis: temporary emergency bridging measure ‘NOW’

By Nick Domburg, LIMES International B.V. , and Jeffrey L. R. Kenens, TeekensKarstens advocaten notarissen

The coronavirus COVID-19, and the measures taken to restrict the spreading of the coronavirus in the Netherlands, have a huge impact on the Dutch economy. The measures announced on 12, 17 and 23 March, to curb the spreading of the coronavirus, mean significant loss of turnover for many businesses, some of which it may be impossible to recover. The Dutch government is taking measures to help entrepreneurs affected by the crisis.

One of the measures is the Temporary Emergency Bridging Measure for Sustained Employment (NOW, Noodfonds Overbrugging Werkgelegenheid). If a company has less or no work for its employees due to extraordinary circumstances, like the coronavirus, this company can claim NOW for a substantial compensation for its paid wages. In this way, Dutch companies can continue to pay employees with permanent and temporary contracts. NOW also applies to the personnel costs for whom the employer has no obligation to continue to pay salary, such as employees with an on-call contract (zero hours contract) or flex contracts.

A company can claim this compensation from the Dutch government for a period of three months (with the possibility to extend it for a further three months) in case of a decrease in turnover of at least 20% as from 1 March 2020 onwards. A maximum of 90% of wages can be claimed, depending on how much turnover the company loses (see below scheme with three examples).

Decrease in turnover  Amount of compensation
100% of turnover 90% of the total wage sum
50% of turnover 45% of the total wage sum
25% of turnover   22,5% of the total wage sum

Upon application, the company commits itself in advance to the obligation not to apply for dismissal on the grounds of business economics for its employees during the period for which the allowance is received. On the basis of the application, the UWV (the Dutch Employee Insurances Implementing Agency) will provide an advance payment equal to 80% of the expected compensation. In retrospect, the actual decrease in turnover will be determined by UWV. An adjustment will be made by UWV when the compensation has been definitively determined if there has been a reduction in the total wage sum. If the compensation scheme is used, the employer will continue to pay 100% of the salary to the employees concerned.

Filing an application is expected to be possible as per 6 April 2020. Further details regarding NOW have been made public by the government on 31 March 2020.

Companies can further apply for a payment extension for income tax, corporate tax, payroll tax, and turnover tax (VAT). The Dutch Tax Administration will put on hold any measures in place to collect payment immediately upon reception of your request. Companies will not have to pay any fines for late payment.

The normal collection interest rate for paying after the payment term has passed, has been decreased temporarily to nearly 0%. This applies to all tax debts. The tax interest rate will also temporarily be set to the lowest possible percentage for all entrepreneurs.

We kindly refer you to for more and up-to-date information for entrepreneurs. Should you have any queries left as to the above, please do not hesitate to contact us. We are happy to help you along.

Nick Domburg

Nick Domburg

GGI member firm
LIMES International B.V.
Tax, Advisory, Fiduciary & Estate Planning
Valkenburg ZH, The Netherlands
T: +31 88 0899 000
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LIMES International B.V. is an independent international tax consultancy firm specialising in crossborder issues. They focus exclusively on companies and expats that cross borders, providing them with a broad range of integrated solutions in tax and expat, legal, payroll, immigration and relocation, pension and insurance, HR, and VAT and customs services.

Nick Domburg is a Partner, specialised in social security and international corporate tax issues.

Published: COVID 19: Labour Law Implications in different jurisdictions, March 2020  



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