Tens of thousands of Dutch firms face collapse over COVID debts, Tax Authority warns

Between 30,000 and 40,000 Dutch businesses are expected to go bankrupt due to unpaid COVID-related debts, with the Dutch Tax Authority (Belastingdienst) facing a potential loss of 1.5 to 2 billion euros. While some of these bankruptcies may still be prevented, thousands of companies are currently struggling to repay deferred taxes and social premiums accrued during the pandemic, AD reports.

According to recent figures from the Belastingdienst, 120,785 businesses are still working to repay COVID-related debts, most of which consist of deferred taxes and employer social premiums. The total outstanding debt stands at 5.9 billion euros.

The estimate comes from Michiel Hordijk, director of the advisory firm IMK, which provides support to small and medium-sized businesses (mkb) navigating financial challenges, including the repayment of COVID-era debts. “We see companies struggling with repayments. Some continue to slog through until they can’t go on and then still go bankrupt,” Hordijk told AD.

Hordijk emphasized that many of the looming bankruptcies could be avoided. Some businesses remain viable in principle but are overwhelmed by the size of their pandemic debt. “The tax authority is open to helping viable businesses,” he told AD. “They’ve already reached agreements with 9,000 businesses on restructuring their COVID debts.”

In practice, these agreements often involve partial debt forgiveness, allowing entrepreneurs to continue operating. “There are tailored arrangements possible with the Tax Authority,” Hordijk added.

However, business owners must actively seek assistance. To qualify, they must demonstrate that their business is viable. “About 350 companies a week send the Belastingdienst a message saying they can’t repay and want a solution,” said Hordijk. “But such a request doesn’t meet the requirements and is therefore rejected by the tax authority. The entrepreneur then thinks nothing is possible. That’s why it’s important for businesses to get advice on what’s possible.”

According to IMK, too many entrepreneurs are unaware of the restructuring options available to them, or fail to present their case in the correct format, resulting in missed opportunities for financial relief.

Hordijk stressed the importance of businesses seeking guidance from experienced advisors before it is too late. He noted that the government is willing to negotiate and even forgive part of the debt, but only if the business is proven to be viable and the request is submitted properly.