Earlier this week, Minister Van Engelshoven appealed to the public to start donating en masse "to your favourite (cultural) institution". She also hinted at her willingness to explore within the cabinet the extent to which donations to cultural institutions can be made extra attractive as an income tax deduction at this very moment. In the meantime, however, there is a short-term problem within the cultural sector that can be easily solved.
The good news is, the Cabinet has been very energetic in announcing the TOZO scheme. This is a temporary adjustment of the so-called 'assistance', which applies when income threatens to fall below the subsistence level as a result of the corona crisis. This particularly affects self-employed entrepreneurs, incidentally by no means only within the cultural sector. The core of the TOZO scheme is, that a person's assets (savings) and the income of his or her partner temporarily do not count when determining the social assistance benefit one is entitled to. The details are yet to be revealed: initially, municipalities will generously provide advances to those who seem to qualify for this benefit.
Flex contract
Meanwhile, details of a second scheme (the NOW), which provides a temporary subsidy on wage costs to employers, have already been announced. Fortunately, the Cabinet has chosen to open this scheme not only to permanent employees, but also to so-called 'equivalents'. These include employees with a flex contract, but also musicians who are not in employment because in the past, together with their client, they chose to use the 'artist arrangement'. Think of substitutes or extra musicians needed by an orchestra to play a certain programme. But other performing artists who play on a freelance basis also often choose to have taxes and contributions deducted from their remuneration.
The beauty of the NOW scheme is that it prevents employers from having no choice but to lay off employees due to the corona crisis. This is because the government pays 90% of the wage bill in a timely manner, at least as long as existing employments continue. For freelancers too, this not only prevents a wave of layoffs, but also a drop in income due to unemployment benefits that eventually end up at the social minimum.
Social minimum
Specifically within the cultural sector, meanwhile, a serious problem is looming. This is because, in practice, at most companies that are on stage, the players who make use of the artists' scheme and those who do not (invisible to the public) are playing brotherly and sisterly side by side. So where it is now possible to properly compensate the first group for the effects of the crisis, the second group is directly dependent on the social minimum. From the idea that both groups consist of ZZP-ers with only the difference that those in the first group have chosen to have their tax obligations settled through the client and those in the second group do it themselves, this is difficult to understand.
At the same time, in this day and age, it is too easy to advocate that the government should also solve this problem by providing additional funds. In the cultural world in particular, there is a solution up for grabs that does not mean a new drain on the exchequer. Indeed, the Netherlands has a large group of funds that have the status of 'cultural ANBI' for tax purposes and whose purpose, to a greater or lesser extent, is to support the cultural world financially. These funds can help make a difference just now by deciding to make a contribution to individual performing artists who need to appeal to the TOZO. By providing a gift to those who, relative to colleagues who previously opted to use the artist scheme, a direct regression to the social minimum can be avoided. But then, of course, such a gift should not subsequently lead to a reduction in the TOZO benefit. Nor should it lead to subsequent discussions with the Tax Office about whether or not the provision of such gifts was an expenditure of funds in accordance with the 'public benefit'.
Hospitality
Even outside the world of culture, by the way, it would be a boon if the TOZO regulated that not only assets and partner income would be excluded, but also donations. Family and friends of, to take just one example, a hospitality entrepreneur will feel compelled to be able to give a loved one something in these times. But again, this will be no consolation if the social assistance benefit he or she is suddenly dependent on would be cut by the same amount.
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