The reserves bvs (privately held corporations) can set aside for losses due to the corona crisis may also consists of investment losses. The loss need not to be linked to the company assets. This is one of the answers the Belastingdienst gave in a document with questions and answers about corona reserves. The corona reserve will allow bvs to meanwhile set off an expected corona-related loss for 2020 against a profit from 2019. This makes a difference for corporation tax. Of course, there are conditions attached to setting aside a corona reserve. For example, in the financial year after its inception the entire reserve must be released into the profit and will be subject to taxation. The loss due to corona for 2020 may not exceed the profit for 2019 either.
The Belastingdienst has drafted a Q&A document for further clarification. It explains that a bv may set aside a corona reserve until the final irrevocable assessment for the year in which the reserve was set aside. The document continues to explain that at first, the tax authorities will only check whether the reserve was not higher than the profit for 2019 at the time it was set aside. Later, the tax authorities may also verify whether the loss was really corona related. A dividend distribution in 2020 is no obstacle for setting aside a corona reserve either. For other emergency measures, such as NOW (Temporary Emergency Bridging Measure for Sustained Employment) and special tax deferral, however, the applicant is required not to distribute dividend or bonuses. Another question concerns investment losses. A corona reserve may consist of such losses as well. After all, it is not a condition that ‘a company must be operated’ ’or that the losses should be linked to the company assets.