Entrepreneurs are increasingly seeking advice on repaying COVID debts

Entrepeneurs seeking advice more frequently
Entrepreneurs who accumulated debts with the Tax Authorities during the COVID-19 crisis are increasingly seeking advice on repaying them. Assistance platform Geldfit reports that the number of calls from entrepreneurs at the beginning of this year has increased sevenfold compared to a year earlier. This concerns hundreds of entrepreneurs. According to Jacqueline Zuidweg from Geldfit, outstanding COVID debts will once again take priority at the Tax Authorities starting from April 1.”

Two-thirds of the debts repaid
In total, over 400,000 entrepreneurs applied for tax deferral (see box), with €47.7 billion granted in COVID tax deferrals. The majority of these entrepreneurs have repaid their outstanding COVID tax debts, as reported by the Tax Authorities last month: two-thirds of the debts have now been cleared.

Uncollectible debts 
As of February this year, there were still €11.5 billion in debts outstanding, involving around 178,000 entrepreneurs, mainly from SMEs and self-employed individuals. Whether the billions in outstanding COVID tax debts will actually be repaid remains uncertain. The Ministry of Finance previously expressed the expectation that €2.5 billion will be uncollectible. To ensure that all debts are repaid, the Tax Authorities need at least 400 additional full-time positions, but they are already facing a staff shortage.

Prevent bankruptcy
It’s certainly not advisable to extend supplier credit longer than necessary and prudent, especially with outstanding COVID-related debts. Most cases of bankruptcy are related to and can be attributed to overdue receivables.

Make sure to take timely action. If you, as a business owner, are facing non-payment issues, reach out to us for advice and assistance with debt collection, and entrust your claim to the specialists at MODINT Credit & Finance.

Sources: nu.nl, rtlnieuws.nl
Photo: Shutterstock 

Need help or advice with your finances or banktruptcy, contact MODINT Credit & Finance. Email naar info@modintcredit.com or call +31 88 505 4700.

Special payment deferral

During the COVID-19 pandemic, the Tax Authorities granted businesses and self-employed individuals the option to defer payment of income tax, corporate tax, VAT, and wage tax. This is referred to as special deferral of payment. Over 400,000 businesses and self-employed individuals have utilized this scheme. Entrepreneurs were thus able to mitigate the impact of declining revenues resulting from the pandemic.

  • As of April 1, 2022, entrepreneurs are required to resume tax payments.
  • As of October 1, 2022, the tax debt must be repaid according to the special deferral payment arrangement.
  • If it’s not possible to repay the COVID-related tax debt on time, individuals may be eligible for relaxations.

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