6 billion euros in tax debt should never be paid

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The cabinet expects that 25-30% of companies that have obtained tax deferrals in the context of the corona crisis will never repay their debt. This concerns around 6 billion euros, State Secretary Marnix van Rij (Taxation) said during a debate in the House of Representatives on Thursday evening. That’s considerably more than the $1.5 billion the firm was originally counting on.

The Secretary of State estimates this percentage based on the number of companies that have already gone bankrupt during the corona crisis or are currently doing less well and are heading towards bankruptcy.

At the start of the corona crisis, the cabinet implemented a set of business support measures. They could, among other things, request salary support or receive assistance in the payment of their fixed costs. Plus, they could seek tax deferrals so they don’t get pushed underwater by the charges.

Part of that sum has already been repaid, but an amount of 20.7 billion euros currently remains unpaid to 282,000 companies, Van Rij said on Thursday. The tax and customs administration will probably never see 6 billion euros. Van Rij clarified that part of the support went to companies that were already on the verge of collapse before the corona crisis.

This means that the government will have to find an additional 4.5 billion euros in the next spring memorandum, in combination with a few other setbacks such as tax compensation for savers in box 3 and the desire for a higher public pension. .

Wave of bankruptcies expected due to end of corona support

Earlier on Friday, it emerged that the number of bankruptcies in April was at its lowest level on record, but experts expect a new wave of bankruptcies now that corona support has ended.

Last week, Statistics Netherlands (CBS) also reported that almost half of the companies that went bankrupt in the first quarter of this year had applied for corona support. CBS agrees with the findings of the secretary of state, who said a number of businesses that would go bankrupt anyway have been kept alive by the aid.

Companies that have applied for tax deferrals will have five years to repay their debts, although some political parties want to extend this period to ten years.

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