Saturday, April 25, 2020

St. Maarten Relief and Stimulus Plan (SSRP) calls for payroll and income support and soft loans for businesses, sole proprietors and unemployed

On April 19th 2020, the government of Sint Maarten launched the Sint Maarten Stimulus & Relief Plan (SSRP) to help mitigate the economic effects of COVID-19. The objective of this plan is to minimize unemployment and to support employers, self-employed persons, and former employees who suffer loss of income due to the coronavirus pandemic.

Qualifying parties are entitled to financial support provided by the government for a preliminary maximum period of 3 months (April, May and June 2020)[1].

 

1. Relief and Stimulus measures for employers

 Business Payroll Support Plan

1.1.1 Criteria

• The employer, as defined in the SSRP, must prove, based on the declared turnover as per the comparison of the monthly turnover tax (“TOT”) returns for the applicable months of 2019 and 2020, that his revenue has declined by more than 20% because of the COVID-19 pandemic;
• the employees of the employer are registered at SZV, in accordance with the Sickness Insurance and Accident Insurance Ordinance; and
• the employer is not active in the following lines of business:
  • Administrative and support service activities;
  • Construction;
  • Education;
  • Electricity, gas, fuel, steam and air conditioning supply;
  • Financial and insurance activities;
  • Human health and social work activities;
  • Information and communication;
  • Manufacturing;
  • Other service activities;
  • Professional, scientific and technical activities;
  • Public administration and defense; social security;
  • Real estate activities;
  • Wholesale and retail trade; repair of motor vehicles and motorcycles;
  • Transportation and storage.

UPDATE: 

Amendment of Payroll Support Plan for the month June 2020 on St. Maarten.

On July 14^th, 2020, the Government of St. Maarten issued a regulation amending the temporary regulation for payroll support concerning the support of payroll expenses that employers can receive for June.

The most important amendments are:

1. The list of sectors that are not eligible for payroll support is not applicable for June;
2. 20% of their own payroll expense must be carried by the employee and SZV will provide up to a maximum of 60% of payroll support;
3. The amount of support is based on the percentual loss in revenue of the employer. For instance, a loss in revenue of 50% means that 50% of the salary expenses are covered by the support, of which 60% will be financed by the SZV, 20% by the employee and 20% by the employer;
4. The names of the employers who receive payroll support in June will be published in the National Gazette, local newspapers and on the internet;
5. The deadline for requesting payroll support is July 31^st, 2020.

For more information, please contact Maarten Tervoort of Baker Tilly in St. Maarten at tervoort@bakertillysxm.com.

Financial support

The Business Payroll Support for employers is based on their registered ZV/OV wages, with a maximum of the ZV wage limit (NAf 5,651.36 per month per employee). The amount of the support depends on the bracket of decreased revenue of the employer as illustrated in the following table.

Decrease in revenue	Impact category	Payroll support
Between 20% and 50%	Medium	60% of registered ZV/OV wages
Between 50% and 80%	Medium/high	70% of registered ZV/OV wages
More than 80%	High	80% of registered ZV/OV wages

Notes

• This financial support is available in relation to employees working fulltime as well as part-time. Both employees working under a permanent or temporary contract can qualify[2].
• For each month of the Business Payroll Support Plan, the employer must submit an application form, including the TOT returns of the relevant months over 2020 and 2019. The deadline for submitting these application forms are as follows:
  • For April: before May 1^st;
  • For May: before May 22^nd;
  • For June: before June 19^th.
• This support will not be available for employees hired on or after April 1st 2020.
• From the moment an employer applies for the Payroll Support Plan, the employer is obligated to keep the employees in service for the duration of the Plan[3].
• To apply for the Business Payroll Support Plan, the employer needs to be able to access the Employer Portal of the SZV. Instructions on how to access and use this portal may be found in the user manual, which we can provide to you upon request.

Lockdown Payroll Support Plan

 Employers who don’t qualify for the Business Payroll Support as explained above, may qualify for the Lockdown Payroll Support over the month April 2020[4]. For this support the same conditions and requirements apply as for the Business Payroll Support, with the following exceptions:

• the deadline to apply for the Lockdown Payroll Support is May 22nd; and
• the employer must be able to prove, based on the declared turnover in the TOT returns of April 2020 and April 2019, that their revenue has declined by more than 20% as a result of the lockdown.
• The employer is not active in the following lines of business:
  • Education
  • Electricity, gas, fuel, steam
  • Financial and insurance activities
  • Human health and social work activities
  • Information and communication
  • Other service activities
  • Public administration and defense; social security
  • Real estate activities
  • Wholesale and retail trade
  • Transportation and storage
    
    

• Relief and Stimulus measures for Sole proprietors

Criteria

• A legally registered sole proprietor or holder of a permit for public vending or public transportation;
• that has no employees and is not an employee; and
• has updated Tax Declaration Forms.

Financial support

The financial support is proposed to be up to NAf 1,150 per month for the months April, May and June 2020[5].

Note

The application form will be available as of April 24^th. Applicants have until May 10^th to submit their application for the month April. Applicants must submit their application form for the months of May and June before the 22^nd of the respective month.

• Relief and Stimulus measures for former employees 

Criteria

• A person who has worked as an employee on the Dutch side of Sint Maarten; and
• can prove that he or she is now unemployed as a result of COVID-19.

Financial support

The financial support for former employees consists of NAf 1,150 per month over the months of April, May and June 2020.

Notes

• The application form will be available as of April 24th. Applicants have until May 10th to submit their application for the month April. At this point it is unclear when the deadline for application over the months May and June will be.
• Persons who cannot prove that their dismissal is a result of COVID-19 may submit a request for Social Assistance from the Department of Labour and Social Welfare.

 

 For further information, please contact the SSRP team of Baker Tilly:

 

Maarten Tervoort, tax advisor, tervoort@bakertillysxm.com

Paula de Bruijn, tax advisor, debruijn@bakertillysxm.com

Linnett Gordon, senior accountant, gordon@bakertillysxm.com

Erik van Engelen, certified public accountant, vanengelen@bakertillysxm.com

 

 

[1] An important caveat is the financial support from the Netherlands as a condition precedent before execution of this plan can proceed. As of the date of publication, this support has not been agreed upon yet. 

[2] At this point it is unclear if the financial support is also available in relation to employees working under a zero-hour contract (in Dutch: nulurencontract).

[3] Employees working under a temporary contract which ends within the duration of the SSRP (April, May or June 2020) do not have to be kept in employment.

[4] It is implied on the website that the Lockdown Payroll Support Plan may only be applicable over the month April 2020. It is unclear if this financial support will also be available over the months May and June 2020.

[5] At this point it is unclear how the financial support for sole proprietors will be calculated. It is clear however that the maximum monthly support is NAf 1,150.