Companies in the Netherlands applying for government support in 2020

In the first week of March 2020, the number of SMEs that asked the Dutch government for compensation due to the outbreak of the coronavirus more than tripled. At the end of February 2020, the Netherlands announced they were willing to help out companies that got into trouble because of the pandemic. These companies could use something that in Dutch was referred to as werktijdverkorting, which roughly translates as "shortening of working time". This was a regulation that companies could request if they expected to have at least 20 percent less work in the next two to 24 weeks. When approved, the Dutch government paid benefits for the hours lost by employees. This benefit normally only applies to special circumstances, such as fires or floods, and was now being extended in the wake of the pandemic outbreak.

Corona changes the rules significantly

On March 19, 2020, the Dutch government announced that after less than a few weeks the system of werktijdverkorting was already going to be replaced due to high demand. In its place came the temprorary noodmaatregel overbrugging voor werkbehoud or NOW. Almost similar to the previous system earlier, the NOW is meant for companies who expect a revenue loss of more than 20 percent. The government support they receive can be up to 90 percent of salaries the companies pay, usually the amount of money employees spend on their employers. This support exists for three months, and can be extended for an additional three months. In return, companies are not allowed to fire any of their employees and have to keep on paying their employees' full salaries. Simply put, employees are to get their normal salaries and are not fired. To make this possible, the Dutch government supports the employer to make this possible despite big revenue losses.

The TOGS: a controversial gift

This emergency legislation was not the only support Dutch companies could request. On March 27th, an "emergency desk" called the TOGS (an abbreviation of Tegemoetkoming Ondernemers Getrofen Sectoren, which roughly translates as Support for Entrepreneurs in Hit Sectors) was launched. The idea here is that certain SMEs can request a tax-free 4,000 euro gift from the Dutch government. This "desk" sparked much controversy in the Netherlands, however, as it was based on a list of official economic registration codes, so called SBI codes. On its launch, codes for companies in non-food, for example, were not included. Additionally, companies with a wrongly assigned code were not deemed eligable for the gift. By the end of March 2020, however, it was estimated that nearly 270,000 companies, or roughly 15 percent of all companies in the country, were eligable.