Corona update - the support from the Federal Government

1. Measures concerning the organisation of work (applicable until 31.03.2021)

1.1 Temporary unemployment due to force majeure

"I am not able to employ the staff anymore. What now?  I'm a quarantined employee. What now?   I'm detained abroad in quarantine, what now? Do I have to continue paying the labour costs?"

The federal government decided on 6 November 2020 to reintroduce the simplified temporary unemployment procedure due to coronavirus for all employers and workers (blue-collar and white-collar workers) from 01.10.2020 until 31.03.2021 inclusive.

As a result, all temporary unemployment due to coronavirus can once again, as of 01.10.2020, be considered temporary unemployment due to coronavirus, regardless of whether or not the employer is recognised as particularly affected by the crisis or whether or not he belongs to a particularly affected sector.

Attention! Employers who were no longer able to use the simplified procedure and who had to resort to temporary unemployment for economic reasons from 1 September 2020 can therefore again invoke temporary unemployment due to coronavirus from 1 October 2020 using the simplified procedure. They can therefore switch to the temporary unemployment scheme due to coronavirus without having to complete any further formalities, even if some workers can still work or if it is still possible to work on certain days.

This scheme is applicable for :

• a complete suspension of the execution of the employment contract (for example, following an imposed closure); or
• a partial suspension of the execution of the employment contract, where the worker can still work certain days a week.

Again this is a derogation from the strict definition of force majeure.

You can find more information about this by clicking here.

1.2 General measure

• Extending access to corona parental leave. This scheme will run until 30 September with benefits that are increased to 150% for single-parent families and families with a disabled child.

2. The bridging right for the self-employed

"I am the manager of a company whose activities have been stopped. I am self-employed and my activity has been interrupted, what now?"  

The government has decided to accommodate these self-employed persons and to provide a replacement income by easing the access to the so-called bridging right.

To this end, 3 modalities of the classical bridging law have been created: the corona bridging law, the relance bridging law and the bridging law in case of quarantine or closure of class, school or childcare. In addition, the traditional bridging law also remains accessible.

Information is accessible by clicking here (Dutch) (French).

3. Postponement and exemption of advances on social security contributions

"Due to the corona crisis, I am not or no longer able to pay my advances for the time being. What to do now?"  

The government provides for the possibility to request postponement or exemption of social security advances.

3.1 Postponement of payment of social security contributions

All self-employed persons can request a postponement of the payment of the advances on the social security contributions for a period of one year without any increase being charged and without impact on their rights. 

This means that the contributions of the first quarter have to be paid before 31 March 2021 and the contributions of the second quarter before 30 June 2021. 

This measure only relates to provisional contributions for the first and second quarter of 2020.

The application must be made in writing through the social insurance fund before 15 June 2020.

3.2 Exemption from social security contributions

Self-employed persons who cannot pay the advances at all can apply to be exempted from the payment of these social security contributions. 

The exemption from social security contributions can be granted in whole or in part.

This exemption can be requested for the provisional contributions or for the contribution supplement after regularisation of the professional income.

Which self-employed persons?

The self-employed person who is self-employed as his main profession and his assisting spouse. This means that the measure does not apply to self-employed persons whose self-employment is a secondary profession, student self-employed persons with reduced contributions, and self-employed persons with a similar secondary profession.

Which option exists for all self-employed persons?

A reduction of the social security contributions for 2020 can be granted to all self-employed persons regardless of whether they are in a main occupation or a secondary occupation if their professional income is below one of the legal thresholds.

When your payment of provisional social security contributions or regularisation contributions is too late?

You will automatically receive a waiver of increases without any request. 

3.3 Postponement of company contribution 2020

The deadline to pay the company contribution, which should normally be paid before 1 July each year, is postponed until 31 October 2020 at the latest. An application for a deferral of payment is not required. 

4. Deferral of social security contributions for employers

"My company is experiencing financial difficulties due to the corona crisis which makes the payment of employer contributions difficult or currently impossible."

Employers can postpone the payment of the social security contributions for the first and second quarter 2020 until 15 December 2020. 

The social security office makes a distinction between two categories of employers: 

4.1 Employers who are automatically entitled to defer their payment 

This category of employers relates to the businesses that are obliged to close down, i.e.: 

• Catering industry;
• Cultural, festive, recreational and sports sector;
• All shops and stores closed in accordance with the provisions of the relevant ministerial decrees, with the exception of:
  • Food shops, including night shops;
  • Pet food stores;
  • Pharmacies;
  • Newspaper shops;
  • Service stations and fuel suppliers

Via the application "coronacrisis check social security deferred payment", these business are given the opportunity to check whether the deferral of payment has been granted correctly (https://www.uitstelrszbetalingen.be). 

4.2 Employers who have to report their closure

Businesses that are not obliged to close down, but that have taken the decision on a voluntary bass to close down have to report their closure to the social security office. These are, for example, businesses that are forced to close because their suppliers or customers have been forced to close. The social security office considers the following businesses: 

• Non-essential businesses, closed because they are unable to apply the sanitary measures;
• Businesses that, notwithstanding that they are not obliged to close, have decided to close down completely, for reasons other than not being able to apply the sanitary measures. These include businesses that have had to close because of the closure of their suppliers or their customers.

These businesses are required to enroll by means of an electronic declaration on honour (D) (F).

4.3. Businesses which are not completely closed down but whose activities are sharply reduced 

Employers, who have not been forced to close their business, but who nevertheless see their economic activities significantly reduced in respect of the 2nd quarter of 2020, can also apply for a payment schedule to pay their employer's social security contributions. To this end, they must file a declaration on honour by means of an electronic form in which they declare that the corona crisis will result for their company:

• either in a reduction of at least 65% of the turnover declared in the VAT return for the 2nd quarter of 2020 compared to the turnover declared in the VAT return for the 2nd quarter of 2019 or the 1st quarter of 2020; or
• in a reduction of at least 65% of the payroll declared to the NSSO for the 2nd quarter 2020 compared to the 2nd quarter 2019 or the 1st quarter 2020.

5. Tax related measures

5.1 VAT Declaration

VAT taxable persons submitting quarterly or monthly VAT declaration, will not have to pay a December advance on the VAT relating to :

• the fourth quarter of 2020 (if you submit quarterly returns); or
• the month of December 2020 (if you submit monthly declarations).

5.2 No VAT on donations of medical supplies to hospitals and additional deduction for certain extra costs

Donations of medical supplies to hospitals and care institutions will not be subject to VAT. 

Also, will it be possible to deduct as professional expenses, temporary extra costs incurred for, for example, the production of medical supplies.

5.3 Alcohol and alcoholic beverages 

The General Administration of Customs and Excise has decided to grant an additional payment term with regard to the payment of excise duties, the levy for packaging for alcohol, alcoholic beverages and the VAT. 

Who is entitled to what? 

• With regard to the excise duties and the levy for the packaging for alcohol and alcoholic beverages:
  • Credit account holders are automatically granted a payment term of four weeks instead of one week.
  • The non - credit account holders will have until the Thursday of the fourth week to submit their return AC4

Who is not entitled? The temporarily registered consignees are not affected by these measures.

From when? This measure applies to declarations made as from 21/03/2020.

• With regards to VAT:
  • Credit account holders will automatically receive a payment term of four weeks instead of one week.

The measures apply until 30 June 2020.

For credit account holders, all declarations submitted in PLDA (PaperLess Douane en Accijnzen / PaperLess Douanes et Accises) before 1 July will automatically benefit from the extension of the payment term.

For those who do not hold a credit account, all deliveries made before 1 July will automatically benefit from the measure to extend the deadlines period for filing   and payment.

5.4 Covid-19 tax shelter system

A new Covid-19 tax shelter system, which is temporary, until the end of the year and is open to all SMEs that have been affected by the Covid-19 crisis.

5.5 increased investment deduction (25%)

An increased investment deduction (25%) for investments made between 12 March and 31 December 2020.

5.6 100% deduction of costs related to events and catering

An increase from 50 to 100% for the deduction of costs related to organising events and catering until 31 December. This avoids a massive postponement of events until next year, which could cause even more problems for the already badly affected sector.

5.7 Suspension of VAT advance till January 2021

Suspension of the VAT advance for December 2020. As a reminder, companies are normally required to pay an advance before 20 December and this will be postponed by one month. The aim is again to improve companies’ liquidity.

5.9 Tax deductions for donations

An increase from 10 to 20% of The share of net income eligible for tax deductions for donations will be increased from 10 tot 20%. At the same time, the tax reduction for donations to approved institutions will be increased from 45% to 60% in 2020. The latter provision is aimed in particular at the voluntary sector and will support NGOs and non-profit organisations whose activities of general interest have been severely affected by the crisis.

6. Payment in installments

Businesses (individuals and legal entities with an enterprise number) that are affected by the coronavirus crisis and have payment difficulties can apply for financial support with the tax authorities FOD/SPF Finances in the form of a plan to pay taxes in installments.  

This installment plan relates to VAT, withholding tax on professional income, personal income tax, tax on legal entities and corporate income tax. 

The eligible businesses can request ease of payment of VAT, withholding tax on professional income, personal income tax, corporation tax and legal entity tax without being exposed to any fines or interest on late payment. 

The eligible business must demonstrate that it is experiencing financial difficulties as a result of the coronavirus, e.g. as a result of a drop in turnover, customers, orders or as a result of being part in a cascade of problems with their partners. 

The application must be submitted separately for each debt before 30 June 2020 (i.e. not for each measure) to the regional tax recovery centre of the municipality where the business is located.

7. Exemption from tax on regional aid

At the press conference on 20 March 2020, the government indicated that the aid measures (premiums, etc.) would not be taxed at federal level. 

8. Measures with respect to the agricultural and horticultural sector

The number of days of occasional work in the agriculture and horticulture are doubled for the year 2020. On days of occasional work the employers in the agriculture and horticulture sector can take advantage of the system of occasional work whereby contributions are calculated on a fixed daily amount. 

Actually, the following applies:

• the maximum number of days for the agriculture sector increases from 30 to 60;
• the maximum number of days for the horticulture sector increases from 65 to 130;
• for chicory and mushroom growers, the additional 35 days are increased to 70. They will thus be able to use the system for a maximum of 200 days in 2020.

Please, do not hesitate to contact us. It goes without saying, that we can assist you, first of all to assess your legal position and to consider what action you can or should take in this crisis. You can always contact us on 02/747 40 07 or CoronaTaskforce@seeds.law. 

Information about regional aid by clicking here.