Overview of support measures

Overview of support measures in Belgium in the context of the corona crisis (Covid-19) - Update 30/03/2020

Peter Empsten
31/03/2020
Overview of support measures

It is clear that the Coronavirus disrupts our society and economy. In order to limit the impact on businesses and self-employed persons, the Belgian government has issued an array of support measures. Below, we provide you with an overview of the different measures in the field of taxation, social security, (un)employment and the economy, as well as financing and guarantee schemes.

  1. Tax

    • Deferment of filing of tax returns:

      • Deferment of Belgian VAT returns and Intra-Community sales listings:

        - February 2020, term extended to April 6, 2020
        - March 2020, term extended to May 7, 2020
        - 1st quarter 2020, term extended to May 7, 2020

      • Annual sales listing VAT for 2019

        - Deadline extended to April 30, 2020
        - If the VAT taxable person has terminated his activity: at the latest at the end of the 4th month after the cessation of his economic activity

      • Corporate, legal entities and non-resident (companies) income tax returns with a filing deadline from March 16 until April 30, 2020

        Taxpayers receive an extension until midnight on Thursday, April 30, 2020 for filing corporate income tax, legal entities income tax and non-resident corporate income tax returns. This additional period only applies to tax returns with a final submission date from March 16 to April 30, 2020.

    • Deferment of payment of taxes:

      In addition to the automatic payment deferrals described below, any taxpayer affected by the Covid-19 crisis may request additional payment periods (payment plan), exemption from interest for late payment and / or cancellation of late payment penalties. This payment facility exists for VAT, corporate tax, non-resident tax, personal income tax and withholding tax and must be applied for no later than June 30, 2020.

      Automatic deferral of payment:

      • VAT

        An automatic extension of payment of two months for VAT without having to pay fines or interest. This deferral applies to the payment for the period:

        - February 2020, payment term extended to May 20, 2020
        - March 2020, payment term extended to June 20, 2020
        - 1st quarter 2020, payment term extended to June 20, 2020

      • Withholding tax on salaries

        An automatic deferral of payment of two months for the withholding tax on salaries without having to pay fines or interests. This deferral applies to payment for the period:

        - February 2020, payment term extended to May 13, 2020
        - March 2020, payment term extended to June 15, 2020
        - 1st quarter 2020, payment term extended to June 15, 2020

      • Corporate tax, legal entities tax, personal income tax and non-resident income tax

        For the payment of personal and corporate income tax, the non-resident income tax and the legal entities tax, an additional period of 2 months will automatically be granted, in addition to the normal payment term, without interests for late payment being imposed. This measure applies to the settlement of taxes for tax year 2019, established from 12 March 2020

      • Deferral of property tax for companies
      • With regard to property tax for companies, it was decided to issue the property tax assessments for companies at a later date in order to alleviate companies financially. The assessment notes will only be sent towards the end of 2020.

    •  

    • Accelerated VAT refunds
    • As of the VAT return of February 2020, all filers of monthly VAT returns can apply for a monthly VAT refund. Previously, this option was only available for license holders and start-up (during the first 24 months of activity). The accelerated VAT refunds do not apply for companies filing on a quarterly basis.

       

    • Specific tax measures:

      In order to avoid that tax obstacles would impede the free provision of certain goods that are currently in high demand in hospitals in the fight against the Coronavirus, the tax authorities have issued some temporary and exceptional tax measures. These measures will apply (for now) from 1 March 2020 to 30 June 2020. The main points of these measures are:

      • The supply of goods and services without consideration is principally equated for VAT purposes with a taxable supply of goods, which would lead to Belgian VAT becoming due in the hands of the supplier. In light of these exceptional circumstances, the tax authorities have therefore confirmed that no VAT should be self-assessed on the donation of certain goods (medical devices and their accessories, as well as protective equipment for healthcare providers and patients - excluding medicines) to specific institutions (mainly hospitals, associations of hospitals, hospital groups and mergers of hospitals, including hospital networks). This tolerance is subject to conditions. For example, the donor must donate the goods free of charge and, in principle, a document must be drawn up (in duplicate) for each donation that takes place. In this document the healthcare institution should confirm that the goods were obtained free of charge. The healthcare institution must undertake to either use the goods in question itself in the context of providing healthcare or to make it available to another healthcare institution free of charge;

         

      • In addition, the administration confirms that giving away goods without consideration will also not lead to taxation in terms of corporate tax, personal income tax or non-resident tax due to abnormal or benevolent benefits granted. In addition, the administration confirms that the costs incurred in connection with the donated goods remain tax deductible. This measure only applies if the conditions regarding VAT are met;

         

      • Certain gifts in kind to specific institutions are temporarily and exceptionally eligible for the tax reduction for gifts in personal income tax (and the tax for non-residents / natural persons). The other conditions and modalities (gift worth more than EUR 40, maximum amount, obtaining a tax certificate, ...) for the granting of the tax reduction remain applicable. It concerns gifts that consist of all kinds of medical material as well as products that are useful in the fight against the Corona virus and that are identified as such by hospitals.

         

  2. Social security

    Measures for both companies and self-employed persons were announced:

    • Social security measures for companies:
      • Deferral of payment of Social security contributions
      • The federal government has granted a deferral of payments of social security contributions until December 15, 2020. The sectors of catering, recreation, culture and sports and all companies affected by a compulsory closure will automatically receive this deferral. However, the deferral until December 15, 2020 also applies to companies that are not affected by a mandatory closure, but that:

        - are closed because they are unable to comply with sanitary measures. These companies must submit a declaration of honour.
        - for reasons other than not being able to comply with the sanitary measures, have decided themselves to close completely. These companies must submit a declaration of honour.

      • Payment plan for employer contributions
      • Companies that experience economic consequences of the Coronavirus and are having difficulties paying their social security contributions can request a payment plan from the Social Security Service for the first and second quarter of 2020. The payment plan applies for a maximum of 24 months. If the company pays its social security contributions correctly, the Social Security Service may exempt you from increases, lump sum penalties and/or interest.

      • Increase in the number of days of occasional work in agriculture and horticulture
      • Following the Coronavirus pandemic, for 2020 the number of days on which employers from agriculture and horticulture can make use of the advantageous system of occasional work, will be doubled, whereby the contributions are calculated on a fixed daily amount.

      • Compensation for telework
      • Employers who grant a temporary additional home-work allowance to their employees following the compulsory nature thereof, can receive a fast-track ruling (accelerated procedure) from the tax authorities that the allowance granted qualifies as an expense proper to the employer, which is tax exempt for the employee. This is a specific, temporary measure that will be introduced to compensate employees for their compulsory homework in the framework of the fight against the Coronavirus. It must concern a lump sum payment of a maximum of EUR 126,94 per month.

      • Supplement to the benefit for temporary unemployment
      • A company may grant its employees who are put into temporary unemployment, a supplement to the benefits the employees receive from the National Employment Service. The employer does not have to pay social security contributions on the mentioned supplement.

    • Social security measures for self-employed persons:
      • Deferral of payment and remittance of increases
      • Self-employed persons may request to postpone payment of their provisional social security contributions by one year. No increases will be charged and there is no impact on your benefits./p>

      • Reduction of provisional social security contributions
      • Self-employed persons can request a reduction of their provisional social security contributions for the year 2020, provided their professional income is below one of the legally determined thresholds.

      • Exemption of social security contributions
      • Full-time self-employed persons and assisting spouses (including start-ups) who are unable to pay their social security contributions may request exemption from contributions. A link with the Coronavirus crisis should exist.

      • “Bridging right” – temporary crisis measure
      • The so-called ‘bridging right’, i.e. a monthly financial benefit, is an additional support measure for self-employed persons who have to interrupt their activity due to the Coronavirus crisis. The condition is that the self-employed person must completely or partially interrupt his activity in March and / or April 2020 due to the government's mandatory closing measures. The ‘bridging right’ can be used for a complete closure of the business, a closure at certain hours, or if the self-employed person is obliged to only work by appointment.

        The fact that the business belongs to a sector affected by the closure measures is sufficient to be entitled to the financial benefit. The duration of the interruption is irrelevant. Even if your activity was not directly affected by the closure measures, a self-employed person may be eligible for the temporary crisis measure. To be entitled, the self-employed activity must be interrupted for at least 7 consecutive calendar days (per calendar month). The monthly financial payment for the month of March and / or April 2020 is 1.614,10 Eur (with family burden) or 1.291,69 Eur (without family burden).

        This measure can be combined with the “Corona nuisance subsidy” on a regional level (see below).

      • Illness and incapacity to work
      • Self-employed persons who have been incapacitated to work for at least 8 days are entitled to an invalidity benefit from the health insurance fund as of the first day. In some cases, the self-employed person may also ask not to pay social security contributions during the period of illness.

     

  3. (Un)employment measures and support for the economy

       

    • Temporary unemployment::

      Although there are two types of temporary unemployment in Belgium, i.e. for economic reasons and in case of force majeure, a broad application of the concept of 'force majeure' will be accepted from 13 March 2020 (and for the entire duration of the governmental measures) and all situations of temporary unemployment by the coronavirus will be regarded as temporary unemployment due to force majeure, even though it may be possible to work for several days. There is currently no prior notification, but this may become the case in the coming weeks. In the meantime, this government measure has been extended to 19 April 2020.

      Temporary unemployment due to force majeure may apply to:

      • blue collar workers and white-collar workers (from the private, public and non-profit sectors);
      • temporary workers during the term of their temporary employment contract (possibly renewable);
      • staff working in educational institutions;
      • students who follow an alternating course.

      Temporary unemployment due to force majeure does not apply to:

      • civil servants;
      • students;
      • full-time self-employed persons.

      In addition, the following additional measures are taken to limit loss of income:

      • Unemployment benefits are temporarily increased from 65% to 70% of the average capped salary (capped at EUR 2,754.76 per month);
      • Unemployment days are equated and included in the calculation of the holiday allowance;
      • The authorities (exceptionally) grant an extra amount of EUR 5.63 per day of unemployment on top of the unemployment benefit.
    •  

    • Corona nuisance Subsidy (Flanders region)::

      Businesses affected by a mandatory closure receive a one-off premium of € 4,000. If additional mandatory closing measures extend the closing period after April 5, 2020, the company will receive an additional closing premium from its location for each additional closing day. This is € 160 per mandatory closing day that coincides with a normal opening day. In the meantime, the government measures have been extended to April 19, 2020.

      The Corona nuisance Subsidy can be applied for online until 5 May 2020 at www.aanvraagcoronapremie.be. The required information is:

      • an e-id and e-id pin code or another digital key (itsme, ...).
      • An active Belgian account number of your company (IBAN format).
      • the regular opening days, as applicable before the Coronavirus measures.
      • The website address (url) of your company.
    •  

    • • Flexibility in the execution of federal public procurement:

      For all public procurement government contracts for which can be proven that they are delayed or non-executed due to the Coronavirus crisis, the federal government will not impose fines or sanctions on service providers, companies or self-employed contractors.

       

  4. Loans and guarantees
  5.  

    • Extension of the PMV guarantee scheme

      The Flemish regional government decided to expand the existing "generic" guarantee scheme, with an additional Coronavirus crisis guarantee of 100 million euros. Via the Coronavirus guarantee scheme companies and self-employed persons can guarantee bridging loans for up to 12 months for existing non-bank debts, while this is only possible for up to 3 months for the existing guarantee scheme.

      Moreover, the cost of the guarantee for the entrepreneur is reduced with 50%, to 0.25%.

      Finally, under the Coronavirus crisis guarantee, bank debts (in addition to supplier debts) of existing credit lines and investment credits that have not yet been placed under guarantee can be guaranteed insofar as the bank is also prepared to allow a minimum of 3 months payment delay or maintain credit lines. As such, the crisis guarantee serves as a catalyst for a flexible banking policy towards companies.

    • The federal government and financial sector reach an agreement to facilitate lending to private individuals, the self-employed and companies

      In order to continue to ensure financing to private individuals, the self-employed and companies during this difficult period, the federal government has drawn up an agreement with the financial sector. This agreement consists of two pillars:

      • The financial sector is committed to defer payment to viable non-financial companies and the self-employed, as well as mortgage borrowers at risk of payment difficulties due to the corona crisis, until 30 September 2020;
      • The federal government will activate a guarantee scheme for all new credits and credit lines with a maximum term of 12 months, which will be provided by banks to viable non-financial companies and the self-employed. The purpose of this guarantee scheme is to maintain the financing of the Belgian economy.

    • Insurance sector
    • For companies, a number of insurance policies (accidents at work, civil liability, etc.) already offer the option of adjusting the premium afterwards if there is a reduction in activity. This will be adjusted automatically. In addition, companies that are required to shut down their activities can obtain deferral of payment of their premium for all premiums that expire between March 30 and September 30 in consultation with their insurer. Finally, the same extension of payment will be applied on loans granted to companies as granted by the banking sector (until 30 September 2020).

      For companies, a number of insurance policies (accidents at work, civil liability, etc.) already offer the option of adjusting the premium afterwards if there is a reduction in activity. This will be adjusted automatically. In addition, companies that are required to shut down their activities can obtain deferral of payment of their premium for all premiums that expire between March 30 and September 30 in consultation with their insurer. Finally, the same extension of payment will be applied on loans granted to companies as granted by the banking sector (until 30 September 2020).

      For any further measures regarding suspension of contracts, both private individuals and companies are advised to contact their insurer or broker directly.

Several additional support measures are still under negotiation/debate. We will of course keep you informed of any updates in this regard.

Should you have any questions regarding the above measures, please do not hesitate to contact us. In addition, we are happy to assist you in submitting the necessary applications for the aforementioned support measures.

Peter Empsten
Peter Empsten
Head of VAT
Crowe Spark