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NOW under certain conditions also for individual operating companies


The last update of this article was on 30 september 2020

The Dutch government extends the Temporary Emergency Measure Bridging for Retention of Work (NOW-scheme or NOW) for groups of companies with less than 20 percent loss of turnover. Individual operating group companies can therefore, under certain conditions, apply for NOW on the basis of their own loss of turnover (which must be at least 20 percent).

Businesses and trade unions have asked for an amendment of the NOW in relation to the part that the loss of turnover of the entire group is decisive. The government accepted such a request because it will not always be possible to maintain employment when turnover loss is determined at group level.

The extension of the NOW came into effect on 5 May 2020. It is therefore now possible for individual operating group companies to apply for NOW on the basis of their own turnover loss.

now for individual operating companies of a group

What does this mean to you?

If the loss of turnover for your group as a whole is less than 20 percent, but independent entities within your group incur a loss of turnover of 20 percent or more, these group entities may be entitled to NOW. This will be the case if you can meet the additional conditions for this particular possibility (see below).

When applying for the final determination of NOW, you must enclose an auditor's report showing that the specific conditions for NOW for an individual operating company have been met.

Expansion NOW for groups of companies

It is made possible for individual operating companies to apply for NOW based on their own loss of turnover (at least 20 percent), if there is a loss of turnover of less than 20 percent within the group as a whole.

The following conditions apply to NOW applications by individual operating companies within a group:

  • The business activities of the legal entity or company do not consist for more than 50 percent of making personnel available within the group (no staff company).
  • The employer must act in accordance with an agreement (including date) on job retention, which it reached prior to the application for the final settlement of NOW (this is not the initial application) with one of the interested associations of employees, and in the absence thereof another representation of employees.
  • The head of the group or the parent company must declare that no dividends to shareholders or bonuses to the Executive Board and to the management of the group and of the applicant company will be paid over 2020 (including other profit sharing, profit distributions to third parties and repurchase of own shares). The applicant company must have the declaration prior to the application for the final settlement of NOW (this is not the initial application).
  • The other operating companies may not carry out contracts or projects to the disadvantage of the company applying for NOW, which would normally carry them out and which projects are deviating for that other entity.
  • The loss of turnover for the group as a whole is less than 20 percent in the chosen three-month period.

In addition, the following provisions shall apply to the determination of the loss of turnover of the operating company:

  • If employees of the company applying for NOW perform work for another legal entity or company within the group, the turnover of the company must be adjusted upwards. 
  • When calculating turnover, the following has to be taken into account: a. the same transfer pricing rules and accounting policies as in the last financial statements adopted before 1 March 2020 are used; and b. movements in inventories of finished products are allocated to turnover.
  • If the condition is not met that other operating companies do not carry out assignments or projects at the expense of the company applying for NOW, the turnover will be adjusted upwards.

Contact us

Nicolien Borggreve

Nicolien Borggreve

Partner, PwC Netherlands

Tel: +31 (0)62 081 66 41

Daniël Sternfeld

Daniël Sternfeld

Partner, PwC Netherlands

Tel: +31 (0)61 089 28 89

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