Dutch gov't expects to write off €6 billion in unpaid taxes due to bankruptcies

The Cabinet expects that it will have to write off 6 billion euros in unpaid taxes in the coming years due to companies going bankrupt, State Secretary Marnix van Rij said to parliament on Thursday in a debate on the coronavirus support. Tax deferrals formed part of the support package, NOS reports.

A total of 400,000 companies made use of the tax deferral scheme. A large part of the deferred taxes has already been repaid, but there is still an outstanding debt of 20.7 billion euros owed by 282,000 companies. Van Rij estimates that a quarter to a third of these companies won't be able to repay that debt. "There are entrepreneurs who were not doing so well before the coronavirus crisis," he said.

Companies must start repaying their deferred taxes from October, and they have five years to repay the debt. "Actually, only then can we see how big the problem is," Van Rij said.

The parliamentarians wanted to know whether there was a way to collect that tax debt without causing additional problems for businesses. Van Rij said that customization is possible in some cases but that the government cannot sit down and look at the figures of tens of thousands of companies and their creditors. He also wants to prevent the government from keeping companies afloat that are not actually economically viable.