On Friday 13 March, the first Royal Decree-Law 7/2020 of 12 March, adopting urgent measures to alleviate the damage caused by COVID-19, was approved.
Tax-financial measures aimed specifically at SMEs and the self-employed.
Other measures are expected in areas such as labour, and in particular in relation to the flexibilisation of Temporary Layoffs (Expedientes de regulación de empleo Temporal - ERTEs). So far, no measures have been specified in this regard. The ERTE would be the legal way to stop paying employees' salaries during the stoppage of activity and only pay social security.
Deferral of the payment of all tax returns and self-assessments for which the deadline for submission is between 13 March 2020 and 30 May 2020. The deferral is also extended to tax debts that until now could not be deferred, such as:
- Withholding taxes (for workers, rents and professionals, among others).
- VAT returns.
- Corporate income tax payments in instalments.
The applications submitted, for practical purposes, means that the overall amount of deferral to be requested by each taxpayer for all their debts cannot exceed €30,000.00.
The conditions of the deferral granted shall be as follows:
- The time limit shall be six months.
- No interest will be charged for late payment during the first three months of deferment.
On the other hand, in this COVID-19 Decree-Law, the Government has also approved credit lines (ICO) of 400 million €.
Although it seems to be a measure that in the short term may alleviate treasury tensions, it seems insufficient in the face of the general standstill that our country's economy is going to experience. At this moment, 14 March 2020, we are waiting for the royal decree to be published after the meeting of the council of ministers. According to press reports, it seems that there are discrepancies between the different political groups that make up the state government.
For further information, please do not hesitate to contact Confialia, business advisors.