Companies are encouraged by the tax authorities to pay their taxes staggered throughout the year through the system of advance payments. The earlier a company pays, the more it is 'rewarded'. Namely, by paying early in advance, any increase in taxes is most easily avoided. The deadline for the first (most advantageous) instalment of prepayments is fast approaching: 14 April 2020!
Today, the benefit of timely prepayment stands in stark contrast to the slogan that can be read everywhere: 'Cash is King'. This means as much as: try to keep as much cash as possible within the company. So is it wise to think about prepayments in these times of crisis?
Today, more than ever, there is a trade-off to be made: keep money within the company to cope with the crisis or pay in advance to avoid a possible tax increase?
In some cases, the choice is easy to make:
- Does the company need all available funds: don't prepay now.
- Does the company have money left over: now do pay in advance.
In many cases, the answer is not so black and white and a trade-off must be made between:
- the tax benefit by paying now, and
- the risk of running into cash shortages or the cost of releasing additional funds.
When in doubt, it seems advisable to choose to keep the money within the company. There will still be opportunities to pay in advance.
They also clearly understood in the government that today it is important to keep money available within the companies. Last-minute it was decided to make an adjustment to the system of advance payments for this year. These adjustments ensure that companies are penalized less fiscally if they make an advance payment later this year.
The adjustments apply only to companies that do not make distributions to their shareholders this year.
For this year, the following percentages are exceptionally used to limit propagation:
*(See also the overview and FAQ on the Corona measures for further explanation.)
Thus, for many companies, it is certainly advisable to pass the first deadline of April 14, 2020 without prepayment.
NOTICE: Some companies have an automatic prepayment system running through their bank (e.g. Bonifisc, Fiscoline, Prepayment Plan, etc.). If no steps are taken, your company may automatically make a prepayment through this system. So be sure to contact your bank to skip the prepayment one time.