The Dutch government has announced a relaxation in the rules regarding the loss of turnover applicable on group level for the application of the NOW facility.
Initially, in order to apply for the NOW facility, the loss of turnover had to be at least 20% on group level, taking into account all group entities (to the extent they have employees who are covered by Dutch social security). If the group as a whole did not have a loss of turnover of at least 20%, then it was not possible to apply for the NOW facility. The Dutch government announced yesterday that the individual companies of the group can apply for the NOW measure if the individual company has a loss of turnover of at least 20% while on group level this loss of turnover of at least 20% cannot be met. This relaxation of the loss of turnover rule is aimed to consolidate employment and further conditions will have to be met in order to apply the NOW facility on an individual operating company level.
The additional conditions are as follows:
- The individual operating company must have its own legal entity;
- The group must state that in 2020 no dividends and/or bonuses will be paid and the company’s own shares will not be bought back;
- The operating company must have an agreement to consolidate employment with the trade union or staff representation of the operating company;
- The group cannot have any staff/employment entities in the group;
Additional audits will have to take place to avoid that staff, turnover, transfer pricing and stock of finished goods will be shifted from one operating company to another to maximize the NOW subsidy.