Government and institution measures in response to COVID-19.
Government and institution measures in response to COVID-19.
Return to homepage | Last updated: 28 October, 2020
Eight pieces of legislation—Royal Decree-Law 6/2020, Royal Decree-Law 7/2020, Royal Decree 463/2020, Royal Decree-Law 8/2020, Royal Decree 465/2020, Royal Decree-Law 9/2020, Royal Decree-Law 10/2020 and Royal Decree-Law 11/2020 —provide initial measures to address the coronavirus (COVID) crisis. The legislation includes measures that address health and the economy at large, with a particular emphasis on the tourism industry, small and medium size enterprises (SMEs), and the self- employed, as well as persons affected by the containment measures. Given the gravity of the situation, it is expected that these are but the first of many laws, decrees and ministerial orders (presumably some would be announced at the next cabinet meeting). These measures are at the national level, and they could be supplemented by measures at regional and local levels
Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.
More flexible mechanisms for temporary adjustments of activity
Other measures– Royal Decree-7 2020
Transitional financial support measures
Paid leave – Royal Decree 10 2020 (Application between March 30 and April 9, 2020)
Minimum indispensable activity – Royal Decree 10 2020 (Application between March 30 and April 9, 2020)
Labour and social security measures
Measures implementing exceptional drawdowns on pension schemes (Royal Decree-Law 15/2020)
Start-ups
Guarantee of liquidity to sustain economic activity
Additional measures to enable an adequate response
Other measures– Royal Decree-7 2020
Measures to support the tourism industry:
Measures to boost corporate finances
Institute for Energy Diversification and Saving
Insurance Compensation Consortium
Line of state guarantees
Government launch of first package of 100 billion euros measure
The Royal Decree-Law also specifies, in relation to this line of guarantees, that the Ministry of Transport, Mobility and Urban Agenda may grant guarantees for up to Euros 1,200 million to implement the measures provided for in Royal Decree-Law 11/2020 on the moratorium on rental payments for families left in a vulnerable situation by COVID-19, thereby securing the fixed-purpose loans granted by financial institutions.
SEPI – Solvency support fund for strategic companies
Eligibility criteria for beneficiary companies
ICO guarantee facility
In the Official State Gazette (BOE) of 17 March 2020, the government announced the launch of a guarantee facility for an amount of €100,000m to mitigate the effects of COVID-19. In July 2020, as the first guarantee facilities neared depletion, a new guarantee facility was launched, the purpose of which was broader in scope than the previous facility, this time including CAPEX, financial and operating leases and R&D&i expenditure (among other items).
Guarantee facilities to mitigate the effects of COVID-19 (€100,000m) |
To guarantee financing for companies and self-employed workers so as to mitigate the financial effects of COVID-19, guarantee liquidity and cover the working capital needs of self-employed workers, SMEs and large companies, in order to keep up production and protect employment. | Expired Deadline: 30 September 2020 At 18 September the financial institutions had consumed 99% of the guarantee facility. |
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Investment guarantee facility (€40,000m) |
To promote and support the granting of new financing to self-employed workers and companies primarily so that they may undertake new investment in Spain, with the aim of adapting, extending or renewing their production and service capacity, or to resume their activities or reopen their businesses (*). | Deadline: 1 December 2020 |
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The government and the financial institutions are faced with the prospect that, having been granted such facilities, companies may, as a result of the new outbreaks, be unable to repay the loans received, and are therefore studying the mechanisms available for extending the time frame of ICO facilities and offering deferrals.
(*) Note: although the main purpose is to promote investment, funds may also be used for the same purposes as under the first guarantee facility (salaries, supplier invoices and current financial and tax obligations). See Investment guarantee facility for further information.
COVID-19 guarantee facility
Guarantee facility, the purpose of which is to provide guarantees for financing for companies and self-employed workers to mitigate the financial effects of COVID-19, guarantee liquidity and cover the working capital needs of self-employed workers, SMEs and large companies, so as to keep up production and protect employment
Management: this facility will be managed by Instituto de Crédito Oficial (ICO), in collaboration with the financial institutions.
Application: through the financial institutions with which ICO has entered into the corresponding collaboration agreements.
(*) Note: in certain situations the amounts could be higher; see European Union Framework for State aid.
Distribution of tranches and cost for the institutions (*)
Tranche (€M) | Self-employed and SMEs | Large corporations | “MARF” promissory notes | CERSA | Self-employed and SMEs - tourist sector | Transportation expenses | Authorised | Deadline |
---|---|---|---|---|---|---|---|---|
First | 10,000 | 10,000 | - | - | - | - | 24-Mar-20 | 30-Sep-20 |
Second | 20,000 | - | - | - | - | - | 10-Apr-20 | 30-Sep-20 |
Third | 10,000 | 10,000 | 4,000 | 500 | - | - | 05-May-20 | 30-Sep-20 |
Fourth | 20,000 | - | - | - | - | - | 19-May-20 | 30-Sep-20 |
Fifth | 7,500 | 5,000 | - | 2,500 | 500 | 16-Jun-20 | 30-Sep-20 | |
Total | 67,500 | 25,000 | 4,000 | 500 | 2,500 | 500 |
99% granted as of 18 September 2020 (€98,878m)
Cost (basis points) | <€1.5m | >€1.5m | ||
---|---|---|---|---|
Term | All types | SMEs and self-employed workers | Large corporations | Large corporations - renewal |
<1 year | 20 | 20 | 30 | 25 |
1-3 years | 20 | 30 | 60 | 50 |
3-5 years | 20 | 80 | 120 | 100 |
(*) Note: the aforementioned cost is automatically transferred to the companies to which financing is granted through the all-in interest rate on financing.
For further information: Línea de Avales Real Decreto-ley 8/2020, de 17 de marzo
Investment guarantee facility
ICO investment guarantee facility
Distribution of tranches and cost for the institutions (*)
Tranche (€M) | Self-employed and SMEs | Large corporations | Authorised | Deadline |
---|---|---|---|---|
First |
5,000 |
3,000 |
28-Jul-20 |
01-Dec-20 |
… |
- |
- |
- |
- |
Although authorised on 28 July 2020, it was not made available to financial institutions until mid-September.
Cost (basis points) | ||
---|---|---|
Term | SMEs up to 80% coverage | Large corporations up to 70% coverage |
<1 year | 20 | 30 |
1-3 years | 30 | 60 |
3-5 years | 80 | 120 |
5-6 years | 80 | 125 |
6-7 years | 169 | 260 |
7-8 years | 188 | 285 |
(*) Note: the aforementioned cost is automatically transferred to the companies to which financing is granted through the all-in interest rate on financing.
For further information: Línea de Avales Inversión Real Decreto-Ley 25/2020, de 3 de julio
Insurance cover facility of up to €2,000m (16 October)
Public procurement measures:
Implementation of the COVID-19 moratorium
Flexibilization measures in certain sectors
Generally speaking, flexibility measures have been adopted to adjust the regulations governing certain sectors and activities, including ports, university research, technological centres, agricultural workers and cooperatives, to the current situation. These measures call for detailed analysis by each of the affected sectors, with the following being particularly worthy of note:
Cooperatives
Worker-owned enterprises and investees
Ports
Insurance and welfare entities
Start-ups
Payment facilities
Possibility of defer the payment of customs duties and import VAT arising from customs declarations up to six months, under the following conditions (among others): the debt amount is between 100 euros and 30,000 euros, foreseen for importers with a volume of operations not exceeding 6M euros in 2019.
Other
Freelance workers and SMEs are allowed to request a payment deferment of invoices for supplies of electricity, natural gas, manufactured gases and liquified petroleum gases by pipeline. Likewise, supplies' distributors will be able to postpone the payment of VAT and excise duties on invoices where the payment has been suspended.
Duty relief
Export
Customs audits
Guarantee of liquidity to sustain economic activity
Suspension of the regime of liberalisation of certain foreign direct investments in Spain (Article 7 bis)
Suspension of the regime of liberalisation of foreign direct investments in Spain, in the following sectors:
Moratorium of mortgage debt for the acquisition of the principal residence (Royal Decree-8 2020)
Other measures– Royal Decree-10 2020 (Recoverable paid leave for workers employed by third parties who do not provide essential services)
Application (between March 30 and April 9, 2020)
Measures to ease the lockdown
Extension of deadlines to file an appeal or economic-administrative claims (eighth additional provision)
Non-computation of the deadline within which to execute resolutions of the economic-administrative courts from 14 March 2020 until 30 April 2020, and suspension of expiration and prescription periods from 14 March 2020 until 30 April 2020 (ninth additional provision)
Exemption from the progressive fees of notarized AJD documents to the formalization deeds of contractual novations of loans and mortgages regulated in the first final provision of RDL 8/2020 (section nineteen of the first final provision).
Temporary suspension of certain payments by electricity and natural gas retailers, and by distributors of manufactured gas and liquefied petroleum gas (via pipeline) (art. 44.4 RDL 11/2020).
Provisional measures for the issuance of authorised electronic certificates (eleventh additional provision)
Main sources of information:
Main sources of information:
Customs measures implemented
Other tax measures with implications for Customs
Tax: Carlos Marin Pizarro – carlosmarin@kpmg.es / Itziar Galindo – igalindo@kpmg.es
Restructuring: Angel Martin Torres – amartin@kpmg.es
Legal: Francisco Uria - furia@kpmg.es / Labor: Francisco Fernandez - franciscofernandez@kpmg.es