Belgian Government, Banks Offer Relief To Companies

Economy
31/03/2020 13:50

The Belgian Government has established a range of financial relief measures to support those companies experiencing difficulties resulting from the market downturn caused by the COVID-19 coronavirus. As detailed in a statement by the Antwerp World Diamond Centre (AWDC), these measures include the postponement of payment for existing credit lines until September 30, the opportunity to set up tax payment plans and provisions to enable companies to retain their employees while placing them on temporary unemployment, with the government providing them with social benefits until such time as the company can pay them again. For a complete overview, click here.

The government has also worked out a plan with the banks to provide additional credit and credit lines, with a maximum duration of 12 months, which will fall under the government guarantee system. The interest on these new credits and credit lines has been capped at 1.25% per annum nominally. All financial institutions operating in Belgium, as well as branches of credit institutions under foreign law, are covered by this plan. This means it also applies to foreign banks active in Belgium, including those that service the diamond industry.

Companies (natural and legal persons) that can demonstrate they are affected as a consequence of the coronavirus can apply for additional support measures, including setting up a plan for repayment of various such as the Carat Tax on diamond revenues, as well as value-added tax (VAT), withholding tax and personal and coroporate income taxes. Companies will have until April 30 to file tax returns for corporate income tax, including the Carat Tax, instead of March 16. The government has also extended deadlines for filing VAT returns and paying taxes that are due in the coming weeks. though they will not be applied to companies that have had structural payment issues irrespective of the coronavirus crisis. 

On March 23, ABN AMRO, which is still a major lender to the Antwerp diamond trade, announced support measures for clients in response to the impact of the coronavirus. The support extends to some 55,000 Commercial Banking clients with a credit facility of up to 2.5 million euros, for whom the payment of interest and principal will be automatically deferred for six months. While the announcement does not mention diamond industry clients, their inclusion seems implied.