Overview of support measures in Belgium in the context of the corona crisis (Covid-19) - Update 15/05/2020

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 most relevant measures in the field of taxation, social security, (un)employment and the economy, as well as financing and guarantee schemes.

The updates are in bold.

1. Tax

• Deferral of filing of tax returns:

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

• March 2020, term extended to May 7, 2020

• April 2020, term extended to June 5, 2020

• 1st quarter 2020, term extended to May 7, 2020 

• Annual sales listing VAT for 2019

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

• Income tax returns companies, legal entities and non-resident companies with a balance sheet date from October 1, 2019 until December 30, 2019 (tax year 2019) 

Companies with a balance sheet date from October 1, 2019 up to and including December 30, 2019 have 7 months from the balance sheet date to submit their returns. Therefore, the date of the annual general meeting is no longer relevant. Concretely this means:

- Balance date in October 2019: limit date is June 2, 2020

- Balance date in November 2019: limit date is June 30, 2020

- Balance date in December 2019: limit date is July 31, 2020

If, as a result of the corona measures, the general meeting has been extended by a maximum of 10 weeks and the company is unable to submit its declaration within this period, further postponement must be requested from the competent Team Management.

• Deferral 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

• April 2020, payment term extended to July 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

• April 2020, payment term extended to July 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 in the framework of the Corona crisis (Covid-19)

As of the VAT return of February 2020, all filers of monthly VAT returns can apply for a monthly VAT refund provided that they comply with the below conditions. Previously, this option was only available for license holders and start-ups (during the first 24 months of activity). The conditions are:

• only for filers of monthly VAT returns;

• the VAT return needs to be submitted via the online portal of the Belgian VAT authorities (Intervat);

• the refund will only be granted when the corresponding box is marked in the Belgian VAT return.

• Corporate and Personal Income Tax prepayments

For companies and self-employed persons facing liquidity problems as a result of the Corona crisis, the Belgian government has decided to increase the advantage percentages for prepayments made by the third and fourth quarter payment due date this year, respectively on October 10 and December 20. Thanks to this support measure, postponing advance payments is less detrimental for companies and self-employed persons.

Specifically, for Q3 advance payments, the benefit increases from 6% to 6.75%, for Q4 advance payments, the benefit goes from 4.5% to 5.25%. This support measure is subject to the condition that no dividends or capital reductions are made during the period from March 12 to December 31, 2020.

The table below shows the adjusted advantage percentages for prepayments. As mentioned, these are higher in the third and fourth quarters (unless there is a dividend payment):

Attention !!! The upcoming prepayments must be on the correct account before the due date: account number BE61 6792 0022 9117 of Collections Center - Prepayments Department, Koning Albert II - laan 33 bus 42, 1030 Schaerbeek. Starting SME companies (art 15 W.Venn) remain exempt during the first 3 financial years.

• 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.  Attention: the above does not apply to goods that are bought to be given away;

• 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.

Similar to the described measures above, the European Commission has issued a decision whereby it implements a relief from import duties as well as a VAT exemption on the import of goods needed to combat the effects of the Covid-19 outbreak during 2020. Please note that both the relief and exemption are subject to certain conditions. Some of these conditions are still subject to further implementation. For example, the goods should be intended to be distributed or made available free of charge by certain bodies and organisations to the persons affected by or at risk from Covid-19 or involved in combating the Covid-19 outbreak. Moreover, the goods should satisfy certain goods requirements and be imported for free circulation by or on behalf of certain State organisations, public bodies, etc. 

1. 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.

• are closed 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.

• see their economic activity significantly reduced for the 2nd quarter of 2020. These companies must submit a declaration of honour, stating that the Corona crisis will lead to:

  • a reduction of revenue in the 2nd quarter of 2020 of at least 65% compared to the revenue of the 2nd quarter of 2019 or the 1st quarter of 2020 (to be proven by the figures reported in the respective Belgian VAT returns), or

  • a reduction of the wage bill declared to the National Employment Service for the second quarter 2020 by at least 65% compared to the second quarter of 2019 or the 1st quarter of 2020.

• 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 126,94 Eur per month. The employer can grant an additional allowance of a maximum total amount of 40 Eur per month for the use of:

• A private internet connection and subscription: maximum of 20 Eur per month; and

• A private computer: maximum of 20 Eur 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.

• Deferral of payment of corporate contribution

The annual corporate contribution payable by companies should normally be paid no later than June 30. The payment term for the 2020 contribution is postponed to October 31, 2020. Payment requests will not be sent until September.

• 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.

• 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).

The bridging right can be applied for by self-employed persons in main occupation and self-employed persons in secondary occupation who pay provisional contributions that are at least equal to the minimum contributions for self-employed persons in main occupation. 

In addition, self-employed persons in a secondary profession whose provisional contributions are calculated on an annual taxable income between EUR 6,996.89 and EUR 13,993.77 and active retirees whose provisional contributions are calculated on an annual taxable income above EUR 6,996.89 are entitled to half bridging right (807.05 euros with family burden and 645.85 without family burden).

If an application was already submitted for the months of March and / or April, no new application must be made for the month of May. The social insurance fund must only be notified if there is no uninterrupted closure of at least 7 consecutive days in May.

This measure can be cumulated with the Corona nuisance premium and the Corona compensation premium (see below). However, it cannot be cumulated with other replacement income that the self-employed person would receive, eg sickness benefits, pension, ...

• 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.

1. (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. Until May 31, 2020, no prior notification must be done by the employer.  This period can still be extended.  

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 (as currently communicated, from the 1st of February to the 30th of June) increased from 65% to 70% of the average capped salary (capped at 2,754.76 EUR per month);

• Unemployment days are equated and included in the calculation of the holiday allowance;

• Unemployment days are considered as worked days for the calculation of the pension;

• The authorities (exceptionally) grant an extra amount of 5.63 EUR per day of unemployment on top of the unemployment benefit (from the 13th of March to the 30th of June).

• An exceptional professional withholding tax of 26,75% is withheld on the payments.

• Corona nuisance Subsidy (Flanders region):

Businesses affected by a mandatory closure receive a one-off premium of 4.000 EUR. 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 EUR per mandatory closing day that coincides with a normal opening day. The nuisance subsidy can be applied for by:

• Self-employed persons, both as main occupation and as secondary occupation, provided that the latter pay social security contributions equal to a self-employed person in main occupation;

• Belgian companies and foreign companies registered in Belgium with a similar status (provided they have at least one working partner or employ one full-time equivalent employee);

• associations with an economic activity employing at least one full-time equivalent employee. 

The company must have an establishment or operating seat in the Flemish Region. In principle, only 1 premium is granted per company. However, in the event that multiple establishments or operating seats are required to be closed, this will be increased to a maximum of five subsidies per company.

The Corona nuisance Subsidy can be applied for online until 3 June 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.

For entrepreneurs who do not have an e-id or another digital key, the application can be done by the accountant.

• Compensation subsidy (new measure since 01/04)

Several businesses who were not obligated to close by the government (e.g. companies in the event sector, (para)-medical professions, specialized food and beverage shops, contractors who carry out urgent repairs, etc.) still suffer significant turnover losses as a result of the Corona crisis. Hence, the Belgian government has decided to also support these businesses by means of a one-off compensation subsidy.

The subsidy amounts to 3.000 EUR for businesses and self-employed persons (main occupation). The subsidy is also available for self-employed persons (secondary occupation), provided that the latter pay the same level of social security contributions as a self-employed persons as main occupation. In addition, a subsidy of 1.500 EUR is provided for certain self-employed persons as secondary occupation.

To be able to claim the compensation subsidy, the business must demonstrate a loss of turnover. The revenue loss should at least amount to 60% compared to the same period last year. The reference period is March 14, 2020 until April 30, 2020. For starters, a turnover decrease of 60% is applied compared to the financial plan drated at the start of the activity. Initially, the entrepreneur will have to file a declaration of honour. We would like to note that an audit will be carried out afterwards to measure the loss of revenue, using the figures reported in the VAT return for the second quarter of 2020 compared to the same quarter in 2019. If there has been a loss of turnover of at least 20% in this audit, it will be assumed that there was indeed a loss of 60% of revenue during the crisis period. In this case, it is not require to proof the actual loss of turnover. Otherwise, the recipient of the subsidy should be able to proof the turnover decrease of at least 60% in the relevant period. We therefore recommend that you keep a consistent record of all supporting documents (billing documents, e-mail traffic, etc.) for evidentiary purposes.

In case the company has several establishments or operating offices, a maximum of five subsidies per company will be granted. The compensation premium cannot be claimed by companies and self-employed persons who were obliged to close as a result of the corona measures. These companies and self-employed persons can claim the corona nuisance subsidy (see above).

The compensation subsidy can be requested at www.vlaio.be/nl/subsidies-financiering/corona-compensatiepremie The application must be submitted no later than June 30, 2020.  

• 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.

1. Loans and guarantees

• 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:

1. 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 without imposing costs for the deferment;

1. 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). 

Moreover, the insurance sector is making an effort to mitigate the negative impact of the corona crisis on individuals who are in financial difficulties as a result. Specifically, for private individuals which can provide that they are finding themselves in financial difficulties due to Covid19, both interest payments and capital repayments on mortgage loans taken out with insurance companies are suspended until September 30. Payments of the outstanding balance insurance premiums may also be suspended until then. Moreover, the insurance sector commits to continue the pension, death, disability and hospitalization cover of the collective insurance policies (taken out by the employer) of the persons who fall into temporary unemployment, without further formalities. Payment of the relevant premiums by the employer will be postponed until September 30, 2020.

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

1. Legal

• Temporary protection against bankruptcy

The Royal Decree No. 15 of April 24, 2020 introduced a legal moratorium that protects companies against certain actions by their creditors. For the time being, this moratorium applies until May 17, 2020.

This implies:

• no protective seizure or executive seizure;

• no forced bankruptcy, dissolution or forced transfer under judicial authority;

• continuity of current contracts (not applicable to employment contracts)

The following companies are excluded:

- whose continuity is not threatened by the spread of the COVID-19 epidemic and its consequences, or

 - which were already on suspension on March 18, 2020

At the request of a creditor, the Chairman of the commercial court can lift the suspension, taking into account all circumstances.

Note: the legal suspension does not affect the obligation to pay due debts!

• Annual general meetings

In order to safeguard shareholders' rights without infringing the introduced corona measures, the following options have been provided for general meetings to be or to be convened before 30 June 2020:

- Either the general meeting is postponed by a maximum of 10 weeks after the latest legal date (which is June 30 for financial years following the calendar year);

- Either the general meeting will be held on the scheduled statutory date, but votes will be cast electronically or on paper, whether or not in combination with proxy voting. This option can be used by all companies, including those where this is not explicitly provided for in the articles of association.

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.