![]() Decline in sales as a result of decreased demandĪ decrease or total stop of demand may lead to lower profits or even losses for group companies. The question arises whether the goods should be stored under customs control. ![]() This requires sufficient storage space in the Netherlands or somewhere else in the European Union (EU). Building up inventoryĪn entrepreneur may choose to build up inventory in anticipation of an increase in demand. Unsold stocks may also have VAT consequences. In these cases it should be considered if it is possible to amortize or revalue stocks against lower business values for corporate income tax purposes. Should demand for certain products decline because of COVID-19, entrepreneurs may end up with excess stock. It should then be investigated if provisions may be formed for corporate income tax purposes in anticipation of expected losses. It cannot be excluded that as a result of inventory purchase issues the production and/or sales comes to a complete stop. In addition, the country of origin is relevant for determining the rate of the import duties. Upon onward delivery of goods that are held as stock outside of the affected country, it should be reviewed whether these goods can be exported from that country and cleared in the country of destination. Absence of the correct documents may result in the goods being held at the border, because of the presumption that the goods originate from the affected country. If goods were previously purchased from an affected country and are now purchased elsewhere, the correct proofs of origin must be available upon customs clearance of the goods. The above may also lead to a situation where goods must be purchased from different jurisdictions. Taxpayers may consider forming provisions for corporate income tax purposes in anticipation of these losses. This may impact (taxable) profits and may very well result in tax losses. This may lead to increased purchase prices for products and/or a decline of available stock and inventory. ![]() Purchase price/inventory issues as a result of declined production volumes abroadĪs a result of COVID-19, many production facilities are being closed or are operating with reduced capacity. Taxpayers should also consider if cancellations may require an adjustment of filed Value-Added Tax (VAT)-returns (e.g., requests for refund of previously remitted VAT). Taxpayers should consider if there are possibilities to form provisions for corporate income tax purposes for such anticipated losses. This may very well lead to substantial losses for operators in these industries. Moreover, these industries may still incur substantial costs if hotels and flights, among others, have already been purchased in advance. The hospitality and travel industries are being impacted severely by these consequences as their revenues will decline. Furthermore, booked holiday trips are being cancelled because people are no longer allowed to travel to certain jurisdictions or because airline companies have postponed fights to certain destinations. Preparations in this regard have already been made and substantial amounts of costs may have been incurred in organizing such events. ![]() Many public events, domestic and abroad, are being cancelled. Potential attention points from a tax perspective Less public events and holiday trips
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