What is a remediation agreement?
A restructuring agreement means that you agree with all your creditors that you will pay only part of your debts. Because of the corona crisis, the Internal Revenue Service is temporarily taking a more lenient approach to one of its conditions for cooperating in a restructuring agreement.
Remediation policy Tax Administration
Normally, the condition is that the Tax Administration receives at least double the payout percentage compared to what you offer your other creditors. But until Oct. 1, 2023, the Tax Administration will settle for at least the same payout percentage!
What should I do before April 1?
We therefore recommend that you enter into discussions with your creditors about a restructuring agreement before April 1, 2024. Because then it is more likely that your creditors will want to cooperate. If you do not have to offer the Tax Office the double percentage, you will have a higher percentage left for all creditors. After all, the Tax Office will settle for a smaller piece of the proverbial pie!
Do you act in a general partnership or a sole proprietorship or is your business a legal entity (for example, a limited liability company, limited liability company or foundation)? This makes a difference to how you enter into a reorganization agreement.
Self employment
ZZP'ers can often do well to contact their municipality. The municipality can start an amicable debt settlement process for them. Sometimes there are longer waiting times there, in which case it is better to go to an external advisor. We know good parties who can help you with this.
NV, BV or foundation
If you operate your business in a legal entity, then you must arrange your own reorganization agreement with your creditors. We often see our clients determine this with their accountant or bookkeeper, and then we are called in as insolvencyattorneys for strategic consultations and convincing creditors who do not initially want to participate.
Consultation before getting started with your accountant is often wise. The choice of wording for your proposal, is narrow and can have far-reaching consequences.
Agreement on remediation proposal
Do all your creditors agree to your payment proposal? Then you can also ask the Tax Administration to write off part of your tax debt. The Tax Administration has standard forms for this, but we regularly see that the form is not entirely appropriate for a client's case. A well-formulated explanation can then be the deciding factor.
No agreement on remediation proposal
Have not all creditors agreed to your payment proposal? Then you can still try to reach a debt settlement agreement through the Homologation Private Agreement Act (WHOA).
In doing so, proper legal guidance is essential: into which classes do you classify your creditors? What important preliminary questions do you want to submit to the judge beforehand? Which creditors can you leave out of the agreement and pay 100%? How do you avoid a bankruptcy petition or seizure, and how do you fund a new partnership with new shareholders who bring in fresh money? Again, close cooperation between your accountant and your insolvency lawyer is essential.
