St. Maarten business support plan

Government has published its business support plan in an effort to stimulate retention of employees. The program is executed by USZV. Requests for support must be made online and can only be processed after creating an online employer account with USZV on the SZV employers portal (https://employerportal.szv.sx/EmployerPortal/UserAccountRequest/UserAccount/).

Who will qualify?

The support created includes 2 types of support, one that provides support as of 1 April 2020 (referred to as the Payroll Support Plan - PSP) and the second providing support as of 1 May 2020 (referred to as the April Payroll Support Plan - APSP). Not all types of businesses can apply for support, 2 separate exemption lists have been created for the PSP and APSP (see exhibit 1).

The conditions to qualify for PSP and APSP are the same; Businesses that do not qualify for the PSP may still qualify for the APSP if they meet the following conditions. These conditions are as follows:

1. A company must have employees and these employees must be registered at SZV under the ZV and/or OV Fund. The company is the one that has to apply for the Payroll Support Plan.
2. From the moment a company applies for the Covid-19 Payroll Support Plan, it is required to keep its personnel in service for the entire period of the Payroll Support Plan. Only layoffs based on temporary employment contracts (whereby this temporary contract will automatically have been terminated at a set date), are exempted.
3. A company is required to prove, based on the declared revenue (the total of the taxed- and exempted revenue) as per the monthly TOT returns for the applicable months of 2019 and 2020 that their revenue has decreased by more than 20% because of the Covid-19 pandemic. Revenue of March 2019 will be compared to that of March 2020 (for APSP starting with April 2020 – April 2019 comparison) for the same period to prove the above. This will be done subsequently for the next two months.
4. If your company was not operational in 2019 then the revenue of February 2020 will be compared to the months of March, April and May 2020. For companies, that were not operational in 2019, additional information will be requested to prove the above.

The business must provide a bank account at a local bank, payments made by SZV will be in Guilders. If you haven’t filed your March returns yet, you need to do so before 24 April. Based on earlier approved measures, you have until 4 May to pay the tax and social security premium.

How much support will I get?

The level of support provided for PSP and APSP is the same, albeit that APSP will commence one month later. The support has a maximum of 80% of the employee’s salary as registered at SZV (the official daily wage) with an individual minimum support of ANG 1,150 and a maximum of (80% of) ANG 5,651.36 (wage limit for Medical and Accident Insurance). Furthermore, the support is limited based on the actual loss of revenues experienced:

The loss of revenue for determining the PSP April support (to be paid before 30 April) will be established based on comparing the revenues of March 2020 with the same for the month of March 2019 as stated in the Turnover Tax Return for those months. The same will be done with the Turnover Tax returns of April 2020 with April 2019 to determine the revenue loss percentage for establishing the May support and so on. The APSP support will start with the comparison of April 2020 and 2019 returns to determine the amount of support to be paid in May.

The payroll support is based on the actual payroll of the month prior to the month for which the support will be paid. For example, the April PSP will be based on the payroll for the month of March. If salaries paid in March have been reduced as a result of the Covid-19 crisis, this lower amount will be the basis for calculating support.

Example

A company has 7 employees. Of these employees 1 earns ANG 1,300, 5 of these employees earn ANG 3,500 per month and 1 earns ANG 9,000. All employees are fulltime. The company has a proven revenue loss of 60%. The calculation of payroll support is as follows:

Employee                                                                                    ANG

1                           ANG 1,300 * 70% = ANG 910                         1,150^[1]

2 - 6                      ANG 3,500 * 70% * 5                                      12,250

7                           ANG 5,651.36 (maximum) * 70%                    3,956

Total support                                                                                17,356

___                                    

  [1] Possibly this amount will be established at 7/8th of this minimum or ANG 1,006.

The support provided in this example is approximately 62.4% of total payroll.

In order to enable SZV to process all the information, companies must file their March tax and social security returns before 24 April (payment of March tax and premiums must be done before 4 May) and for April and May returns before the regular deadline (15th of the month).

Companies will be required to sign a declaration before the payments of the Payroll Support Plan and the April Payroll Support Plan can be released. This will ensure payroll support received is based on accurate information and that the employees will receive their salaries as per the Covid-19 stimulus payroll support plan. Non-compliance with the stipulations of the Payroll Support Plan or the April Payroll Support Plan might lead to sanctions against the employer which include repayment of (a part) of the government contribution regarding the Covid-19 stimulus payroll support plan.

Review

The companies that received PSP or APSP will be subject to review. SZV, in cooperation with the Inspectorate of Taxes and the St. Maarten Audit Team will be conducting audits to determine whether the support provided was correctly claimed.

 Should you have more questions or need assistance, feel free to contact us at info@sx.gt.com

Exhibit 1