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Belgium

Paul Hastings in collaboration withLiedekerke, Wolters, Waelbroeck & Kirkpatrick
Liquidity Measures
Reliefs
Other

Liquidity Measures

Deferral Of Payments Under Existing Credit Facilities

Government Measure

Undertakings financially affected by the COVID-19 outbreak can apply for a payment deferral under their corporate credit facilities for a maximum period of six months, pursuant to which such undertakings will not have to repay principal under such facilities for a maximum period of six months. Interest on loans will remain due and payable.

Once the deferral period has expired, repayment of principal will resume and the term of the credit facility will be extended by the deferral period.

 
Eligibility

Payment deferrals of corporate credit facilities may be requested by undertakings (established in Belgium) that are non-financial enterprises, which meet each of the following three criteria:

  • the relevant undertaking faces liquidity shortages due to the COVID-19 outbreak;
  • the relevant undertaking was not in payment default in respect of existing credit facilities, taxes or social security contributions on 1 February 2020 or had not incurred late payment delays of more than 30 days with respect to existing credit facilities, taxes or social security contributions on 29 February 2020; and
  • the relevant undertaking had fulfilled all its contractual credit obligations with all banks in the 12 month period prior to 31 January 2020.

Payment deferrals may only be requested for credit facilities with a fixed repayment schedule; other types of credit facilities are not covered by this measure.

 
Supervising Authority

Belgian National Bank, Belgian federal government and financial sector.

Applications for payment deferral to be made directly to the bank.

 
Availability Date(s)

Applications for payment deferral to be submitted by 31 October 2020, at the latest.

Hindrance Compensation Premium

Government Measure

Undertakings that have to close as a result of the COVID-19 outbreak and which satisfy certain conditions can benefit from a one-time compensation premium. The amount of the compensation premium depends on the region in which the undertaking is located:

  • Brussels Capital: €4k per establishment unit of the undertaking, with a maximum of five compensation premiums being paid per undertaking;
  • Flanders: €4k per establishment unit of the undertaking, with a maximum of five compensation premiums being paid per undertaking plus an additional amount of €165 per day that the undertaking is closed after 5 April 2020; and
  • Wallonia: €5k (one premium per company number).

These compensation premiums are tax-free and, therefore, will not be subject to income taxes.

 
Eligibility

Undertakings must meet the following criteria to be eligible for the hindrance compensation premium:

Brussels Capital: Undertakings should: (i) have less than 50 FTEs; (ii) be active in one of the sectors listed in this Decree; and (iii) face a forced closure due to the measures imposed by the Belgian government as a result of the COVID-19 outbreak.

Flanders: Undertakings should face a forced closure due to the measures imposed by the Belgian government as a result of the COVID-19 outbreak.

Wallonia: Undertakings should have: (i) less than 50 FTEs; and (ii) an annual turnover of less than €10m or an annual balance sheet total of no more than €10m. Undertakings can verify whether they are eligible for the compensation premium by entering their enterprise number here.

 
Supervising Authority

Regional authorities

 
Availability Date(s)

Brussels Capital - Application to be filed by 1 June 2020, at the latest.

Flanders - Application to be filed by 18 June 2020, at the latest.

Wallonia - Application had to be filed by 12 May 2020, at the latest.

Compensation Premium (Flanders)

Government Measure

Undertakings which are not forced to close but suffer from a significant decrease in turnover as a result of the COVID-19 outbreak, can benefit from a one-time compensation premium of €3k (per establishment unit of the undertaking, with a maximum of five compensation premiums being paid per undertaking).

These compensation premiums are tax-free and, therefore, will not be subject to income taxes.

 
Eligibility

Undertakings must meet the following criteria to be eligible for the compensation premium: (i) be situated in Flanders; (ii) have a decreased turnover of more than 60% (compared to the same period last year) due to the COVID-19 outbreak; and (iii) not be entitled to the hindrance compensation premium (mentioned above).

 
Supervising Authority

Flemish government

 
Availability Date(s)

Not yet implemented.

Compensation Premium (Wallonia)

Government Measure

Undertakings that are not forced to close but whose activities were substantially interrupted in March 2020 and April 2020 as a result of the COVID-19 outbreak can benefit from a one-time compensation premium of €2.5k.

These compensation premiums are tax-free and, therefore, will not be subject to income taxes.

 
Eligibility

Undertakings must meet the following criteria to be eligible for the compensation premium: (i) be situated in Wallonia; and (ii) be eligible for a full “bridge compensation” (overbruggingsrecht/droit de passerelle) in March 2020 or April 2020.

 
Supervising Authority

Walloon government

 
Availability Date(s)

Not yet implemented.

Subordinated Loan (Flanders)

Government Measure

Eligible SMEs can apply for a subordinated loan from ParticipatieMaatschappij Vlaanderen for a minimum amount of €25k and a maximum amount of €2m and for a term of three years. Interest on the loan is payable at the end of the term of the loan.

 
Eligibility

Financially sound and viable SMEs situated in Flanders are eligible for such a subordinated loan provided that the following criteria are met by the relevant SME: (i) it has experienced financial difficulties due to the COVID-19 outbreak; (ii) it is not considered to be an undertaking in difficulty; (iii) it did not have arrears on current credits, taxes, VAT or social security contributions at the beginning of the COVID-19 outbreak; (iv) its existing bank loans and other credits remain in place (meaning that the concerned financial institutions remain involved); and (v) 80% of its total workforce at the end of 2019 is (or will be on short notice) employed (i.e. not temporary unemployed) or it re-employs (i.e. ends temporary unemployment of) 50% of its total number of employees.

 
Supervising Authority

Flemish government, ParticipatieMaatschappij Vlaanderen

 
Availability Date(s)

In place.

Rebound Loan (Wallonia)

Government Measure

Eligible SMEs that have cash-flow needs can obtain a rebound loan of a maximum amount of €45k on very favourable terms.

SMEs are not entitled to a rebound loan if they have received the hindrance compensation premium or the compensation premium (see above).

 
Eligibility

SMEs situated in Wallonia that have cash-flow difficulties.

 
Supervising Authority

Walloon government and the financial institutions.

 
Availability Date(s)

In place.

Two Month Extension For The Payment Of Certain Taxes

Government Measure

A two month extension has been granted for the payment of the following taxes:

  • Personal income tax, corporate income tax, non-resident income tax, legal entity tax, with respect to tax assessment year 2019 whereby the tax is assessed as from 12 March 2020 onwards.
  • VAT and payroll tax with respect to February 2020, March 2020 and April 2020 for monthly taxpayers and with respect to the first quarter of 2020 for quarterly taxpayers.
 
Eligibility

This measure applies to undertakings, entrepreneurs and individuals. More detailed information can be found on the FPS Finance website.

 
Supervising Authority

FPS Finance

 
Availability Date(s)

N.A.

Payment Deferral Plan

Government Measure

Eligible undertakings may make an application for the deferral of payment of payroll tax, VAT, corporate income tax and legal entity tax. The granting of a deferral, and the duration of any such deferral, is at the discretion of the Belgium tax authorities.

 
Eligibility

All undertakings with a valid Belgian enterprise number that encounter hindrance as a result of the COVID-19 outbreak. The undertakings concerned should file a specific form. For more information about eligibility please see here.

 
Supervising Authority

Regional Tax Collecting Service

 
Availability Date(s)

The request form should be filed by 31 December 2020, at the latest.

Reliefs

Deferral of social security contributions

Government Measure

Undertakings can apply to defer the payment of social security contributions for the first and/or second quarter of 2020 until 15 December 2020 without incurring interest.

 
Eligibility

For an undertaking to benefit from this deferral, it is necessary for the COVID-19 outbreak to have had a (serious) negative financial impact on the undertaking. However, some undertakings are granted a deferral automatically (e.g. shops, restaurants and pubs which were forced to close by order of the Belgium government in connection with the COVID-19 outbreak).

Further information is available here.

 
Supervising Authority

ONSS/RSZ (National social security administration)

 
Availability Date(s)

If no automatic deferral applies, an application for deferral must be made before 15 June 2020.

Insurance payment deferrals

Government Measure

Undertakings forced to suspend their activities as a result of the COVID-19 outbreak will be able to obtain a payment deferral, by agreement with their insurer, for all insurance premiums due between 30 March 2020 and 30 September 2020.

 
Eligibility

These support measures concern all undertakings which have been affected by the COVID-19 outbreak and which have insurance contracts in place with Belgian insurance companies.

 
Supervising Authority

National Bank of Belgium (NBB) and Financial Services and Markets Authority (FSMA)

 
Availability Date(s)

In place.

Amendment of percentages of tax benefits for pre-payment of income taxes

Government Measure

The percentages of the tax benefits granted for pre-payments of income taxes in the third and fourth quarter of the current financial year, with expiry dates respectively on 10 October 2020 and 20 December 2020, are increased.

The tax benefits for companies are increased from 6% to 6.75% for pre-payments in the third quarter and from 4.5% to 5.25% in the fourth quarter.

 
Eligibility

All undertakings that are experiencing liquidity problems due to the COVID-19 outbreak (subject to the below exceptions).

The following companies are not eligible:

  • companies that have acquired their own shares or have executed a capital decrease between 12 March 2020 and 31 December 2020; and
  • companies that have paid or granted a dividend between 12 March 2020 and 31 December 2020.

Further information is available here.

 
Supervising Authority

FPS Finance

 
Availability Date(s)

N.A.

Other

State Guarantee Scheme

Government Measure

The Belgium government has pledged a total amount of €50b as part of a guarantee scheme to cover losses incurred by the financial sector because of a systemic lapse of loan repayments resulting from the COVID-19 outbreak.

New bank loans and credit facilities up to €50m per company (or group of affiliated companies) will be guaranteed by the Belgium government. New credit facilities for an aggregate amount in excess of €50m will require approval of the Belgium government.

The maximum interest on new bank loans and credit facilities under the State Guarantee Scheme shall be 1.25% (excl. fees).

 
Eligibility

The State Guarantee Scheme applies:

  • to new bank loans and credit facilities with a maximum maturity of 12 months (including bank loans and credit facilities with an unlimited duration that can be terminated by the lender or the borrower within the first 12 months of being granted) granted between 1 April 2020 and 30 September 2020 to non-financial enterprises that are registered in the Crossroads Bank for Enterprises (both physical and legal persons); and
  • only to companies that can show that they were financially sound and viable before the COVID-19 outbreak.

The State Guarantee Scheme does not cover refinancing of existing loans.

 
Supervising Authority

Belgian National Bank, Belgian federal government and financial sector

 
Availability Date(s)

The Royal Decree entered into force on 1 April 2020 and is applicable to credits granted on or following 1 April 2020.

Government reinsurance program for credit insurances

Government Measure

The Belgium government has entered into a protocol agreement with several players in the credit insurance business in relation to a reinsurance program of the Belgian State for short-term commercial credits (less than 2 years).

The credit insurance companies active in Belgium have undertaken to keep the credit limits that have been utilised in the 12 months prior to 1 March 2020 in place, to the extent possible, until the end of 2020. In exchange, the risks supported by those credit insurance companies are reinsured under the government reinsurance program.

The protocol agreement was concluded under the condition precedent of obtaining the approval of the European Commission (which has not yet been obtained).

 
Eligibility

Policyholders domiciled in Belgium and insured with a credit insurance company active in Belgium.

 
Supervising Authority

Belgian federal government and the Belgian National Bank

 
Availability Date(s)

To become effective once the credit insurance companies and the reinsurer have entered into a bilateral reinsurance agreement.

Temporary moratorium

Government Measure

Undertakings that are experiencing financial difficulties due to the COVID-19 outbreak are protected against seizure of assets, bankruptcy and judicial winding-up. In addition, payment terms included in any restructuring plan are extended and agreements entered into prior to the entry into force of the Royal Decree in relation to the temporary moratorium cannot be terminated unilaterally or judicially.

 
Eligibility

The temporary moratorium applies automatically (without the need for court intervention) to all enterprises whose continued existence is threatened due to the financial impact of the COVID-19 outbreak provided that certain criteria are met. One of the main requirements for an enterprise to benefit from this measure is that the enterprise can demonstrate that on 18 March 2020 (i.e. the date of commencement of the lockdown in Belgium) it was able to pay its debts as they fell due.

 
Supervising Authority

Belgian federal government

 
Availability Date(s)

The Royal Decree in relation to the temporary moratorium entered into force on 24 April 2020.

This temporary moratorium will last until 17 June 2020.