The Spanish authorities have published legislation to alleviate the impact of the COVID-19 pandemic. The tax measures are as follows:
Guarantee of liquidity to sustain economic activity
- Suspension of tax time periods (Art. 33 Royal Decree-Law 8/2020)
- Royal Decree 465/2020 of 17 March 2020 clarifies that the suspension of the statutory periods envisaged for administrative procedures referred to in Royal Decree 463/2020, declaring a state of emergency, does not apply to tax-related deadlines, subject to special regulations and, specifically, that it does not affect deadlines for filing tax returns and self-assessments. The State Tax Agency website confirms this decision.
- In general terms, the main measure adopted in tax fiscal area is an adjusting of the deadlines for tax procedures, which have, for the most part (albeit not across the board), been extended to 30 April or 20 May. Significant exceptions include the obligation to self-assess taxes or file informative returns, which remain subject to the usual deadlines.
- In particular, the following deadlines for tax procedures are extended:
- the time periods for payment of tax debts resulting from assessments issued by the authorities, both during the voluntary payment period and during the enforcement period,
- the expiry dates for time periods and split payments under deferred and split payment agreements that have already been granted.
- Moreover, between 18 March 2020 and 30 April 2020, guarantees will not be enforced against real estate assets in administrative enforced collection proceedings.
- The period running from 18 March 2020 to 30 April 2020 will not be counted for the purposes of calculating the maximum duration of tax enforcement, penalty and review proceedings conducted by the STA. Likewise, this period will not be counted for the purposes of limitation periods with respect to the rights of either the tax authorities or the taxpayer, or for the purposes of time barring.
Transitional financial support measures
- Deferral of tax debts (art. 14 Royal-Decree Law 7/2020)
- The deferral of payment of tax debts shall be granted for all tax returns and self-assessments with a filing and payment deadlines falling between 13 March 2020 and 30 May 2020.
- Eligibility: self-employed and small and medium-sized enterprises (SMEs) whose turnover in 2019 was less than EUR6,010,121.04
- Conditions of deferral: 6 months, with no interest accruing for the first three months.
- This deferral also applies to certain tax debts that would ordinarily be excluded from this option, such as: withholdings and payments on account, VAT and instalment payments in respect of corporate income tax.
Deferral of customs debts (art. 52)
- The payment of customs debts and related taxes, arising from customs declarations submitted during the period 2 March 2020 to 30 May 2020 inclusive, may be deferred, provided that these requests are less than EUR 30,000 and that the amount of debt to be deferred is greater than EUR 100.
- The aforementioned deferral is not applicable to VAT returns that are settled on the import of goods, as established in art. 167. second paragraph of VAT Law (37/1992).
- The following conditions must be met for any payment deferral request:
- The request is made on the customs declaration.
- The notification of any payment deferral approval will be made as planned for customs debt, in line with art. 102 of the Union’s customs regulation.
- The guarantee provided in relation to obtaining the cleared products will be valid for obtaining the deferral, and still affecting the payment of the customs debt and related tax until all requirements have been met by the obligor of the deferred debt, notwithstanding the provisions in section 3 of article 112.3 of the Union’s customs regulation.
- In order for the deferral to be granted, it will be necessary for the recipient of the imported goods to be an individual or entity with 2019 trading volume no greater than EUR 6,010,121.04- .
- The conditions for the deferral will be as follows: (i) the deferral will have a duration of 6 months; (ii) no interest for late payment will accrue during the first three months of the deferral.
Application of article 33 of the Royal Decree-Law 8/2020 to Autonomous Communities and Local Districts (art. 53)
- It is noted that the suspension of tax deadlines regulated in article 33 of the Royal Decree-Law 8/2020 is applicable to actions and procedures governed by the General Tax Law (LGT) and its development regulations, and that they may be made and processed by the tax administrations of Autonomous Communities and Local Districts. The suspension also applies to actions and procedures governed by the revised text of the Regulatory Law for Local Tax Authorities.
- The suspension will apply, as established in the fifth transitional provision of the Royal Decree-Law 11/2020, to procedures that have started prior to 18 March 2020 – the date when the Royal Decree-Law 8/2020 came into effect.
Filing and payment deadlines
Royal Decree Law 14/2020 of 14 April 2020 was published in the Official State Gazette on 15 April 2020 and extended the filing and payment deadlines for certain tax returns and self-assessments (hereinafter, Royal Decree-Law 14/2020).
- The sole article of the above Royal Decree-Law provides that taxpayers with a volume of business not exceeding Euros 600,000 in 2019 shall have until 20 May to file and pay tax returns and self-assessments with deadlines falling between 15 April and 20 May. In other words, qualifying taxpayers may defer the filing of quarterly VAT returns, corporate income tax instalment payment returns, and personal income tax returns. The deadline is also extended by one month, from 15 April to 15 May, where taxpayers have opted for payment by direct debit.
- This measure will also be applied to the public administrations (including social security) although in such cases, budget rather than volume of business will be used as the relevant threshold value.
- This extension does not apply to:
- Groups of entities taxed under the CIT consolidation regime, irrespective of revenues.
- Groups of entities taxed under the special regime for VAT groups, again, irrespective of their volume of business.
- The filing of returns regulated by the Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code and/or its implementing regulations.
- Royal Decree-Law 15/2020 of 21 April, on urgent supplementary measures to support the economy and employment (which was published in the Official State Gazette and entered into force on 23 April), contains a series of measures to shore up company financing, provide tax-related support, facilitate the adjustment of the economy and protect employment and citizens.
- The tax-related measures introduced by the Royal Decree-Law include: an extraordinary scenario is introduced in which taxpayers may elect to pay CIT in instalment payments (calculated having regard to the tax base) per article 40.3 of the CIT Law; VAT rates are reduced for supplies of healthcare equipment by national producers to not-for-profit public entities and hospitals as well as for books, magazines and online newspapers; tacit waiver of the objective assessment method for personal income tax in 2020 is permitted, with the introduction of a limitation on the duration of the effects of such waiver. Where the objective assessment method is not waived, the amounts of instalment payments and payments on account determined having regard to signs, indices or modules are temporarily adapted; the term of effectiveness of certain tax provisions under Royal Decree-Laws 8/2020 and 11/2020 concerning tax procedures is extended; the enforcement period for certain tax debts will not start running where State-backed financing is granted; bids are cancelled, with the refund of deposits and bid prices paid in auctions. Lastly, specific measures are introduced regarding certain port charges and a deferral of tax debts is permitted.
Corporate Income Tax (CIT)
- Taxpayers whose tax period commenced as from 1 January 2020 and with a volume of business not exceeding Euros 600,000 in 2019.
- Such taxpayers may exercise the option to make instalment payments in respect of the portion of the tax base for the first 3, 9 or 11 months, i.e., taking the results from 2020 as the benchmark, by filing the instalment payment calculated using this method by 20 May.
- Taxpayers whose tax period commenced as from 1 January 2020 and whose net revenues ranged between €600,000 and €6,000,000 in the 12 preceding months.
- In this case, the option may be exercised within the period for the instalment payment to be filed in the first 20 days of the month of October 2020, also by applying the above method for calculating the tax base by the deadline. Instalment payments made in the first 20 calendar days of the month of April 2020, which are not eligible for the measure, may be deducted from the amount of the remaining instalment payments made on account of the same tax period determined in line with the option envisaged in the preceding paragraph.
Personal Income Tax (PIT)
- In 2020, on an exceptional basis, the selfemployed may opt out of taxation by modules, declaring their income in line with the direct assessment method.
- The amount of instalment payments and payments on account determined in line with signs, indexes and modules is temporarily adjusted.
- Recognition of the right to an “economic benefit” for self-employed workers who stopped their business activities due to the crisis or who are experiencing a drastic drop-off in revenues.
Value Added Tax (VAT)
- The VAT levied on the supply of medical supplies by domestic manufacturers to public and not-for-profit entities and hospitals has been reduced to 0%.
- The VAT on electronic books, magazines and newspapers has been reduced to bring it into line with the rate applicable to their paper counterparts.
- Calculation of the quarterly charge under the simplified VAT regime.
- Effects of the waiver of the PIT objective assessment method and subsequent revocation.
Extension to the term of exceptional tax provisions
- The terms of certain tax measures envisaged in Royal Decree-Laws 8/2020 and 11/2020, previously running until 30 April or 20 May, as applicable, have been extended until 30 May.
- The above extension will also apply to the autonomous community and local tax authorities in line with the reference made in article 53 of Royal Decree-Law 11/2020.
- Under this extension, any references made to certain tax deadlines that were extended on 18 March 2020 to 30 April and 20 May 2020 will be understood to refer to 30 May 2020.
- This measure will apply, inter alia, to deadlines for payments (in both voluntary and enforcement periods) deriving from tax assessments, as well as for payments deriving from deferral and instalment agreements and deadlines for filing administrative and economic-administrative appeals, for replying to notifications, notices of attachment and requests for tax-related information and for filing submissions in tax enforcement, penalty and other procedures. Also affected are deadlines for auctions and awards of assets in such connection or in enforcement of guarantees in enforced collection procedures, while the deadline for replying to requests made by the Directorate-General of the Cadastre has also been extended.
Meanwhile, the maximum duration of tax enforcement, penalty and review procedures has been extended until 30 May, while the period running from 18 March to 30 May 2020 will not be factored in for the purpose of tolling and suspending the actions and rights envisaged in the tax legislation, nor for the purposes of the deadline for the enforcement of economic-administrative rulings.
Non-commencement of the enforcement period for certain tax debts
RD-Law 15/2020 provides for the possibility of making payment of the tax debts deriving from any assessment or self-assessment in the state tax system subject to obtainment of the special state-backed financing referred to in RD-Law 8/2020, thereby avoiding the commencement of the enforcement period and the related surcharges, to which end the following requirements must be met:
- In the case of returns and self-assessments filed in the voluntary period between 20 April 2020 and May 2020:
- A line of credit partially secured by public guarantees, at least up to the amount of the tax debt, must have been requested within or prior to the period in which the return or self-assessment must be filed.
- Within not more than 5 days of the date on which the deadline for filing the return or self-assessment falls, the tax authorities must be provided with a certificate issued by a financial institution, evidencing that an application for financing has been filed, the amount sought and the tax debts to be financed.
- The application must be approved, at least in respect of the amount of the above debt.
- The tax debt must be effectively settled in full immediately on grant of the financing. This requirement will not be met where the debts are not paid within one month of the end of the voluntary period for filing returns and self-assessments.
Failure to meet any of the above requirements will trigger the enforcement period on finalization of the period provided for in article 62.1 of the General Taxation Law.
Since the wording of the law raises certain doubts as to when tax debts enter the enforcement period, the State Tax Agency will have to interpret the measure in order to clarify the situation of taxpayers where the grant of the relevant financing is delayed by more than one month as from the end of the voluntary period for filing returns and self-assessments. Similarly, with respect to cases in which such financing is denied, a distinction must be drawn where this occurs before or after the one-month period, while also clarifying situations in which an application is denied partially and the financing granted does not cover all of the tax debts affected.
Deferral of port-related tax debts
The port authorities may grant a deferral of tax debts in respect of any port fees charged between 13 March 2020 and 30 June 2020, inclusive, subject to a request from the relevant taxpayer, for a maximum of six months and without levying any late-payment interest or requiring any guarantees.
Cancellation of bids and reimbursement of deposits and prices of winning bids
- In auctions staged by the STA, bidders may request the cancelation of their bids and the release of any deposits arranged.
- Under certain conditions, bidders and awardees in auctions will also be entitled to reimbursement of the deposit and, where applicable, the price of the winning bid paid in, where so requested.
27 May 2020 saw the publication in the Official State Gazette of Royal Decree-Law 19/2020 of 26 May, adopting supplementary agricultural, scientific, economic, employment, social security and tax measures to mitigate the effects of COVID-19 (hereinafter, Royal Decree-Law 19/2020), which entered into force on 28 May 2020.
The tax-related measures approved in the latest Royal Decree-Law are as follows:
- The filing deadline for corporate income tax returns is adapted to the new deadlines for the authorisation for issue of the annual accounts.
- In this regard, it should first be noted that the deadline for filing CIT self-assessments remains unchanged, i.e. 25 calendar days after the end of the six-month period following the end of the tax period (article 124.1 CIT Law).
- However, with a view to adapting the CIT filing deadline to the new deadlines for the authorisation for issue and approval of annual accounts, article 12 of Royal Decree Law 19/2020 allows taxpayers who have been unable to approve their annual accounts prior to the corporate income tax filing deadline (25 calendar days after the end of the six-month period following the end of the tax period) to file their CIT return with the “annual accounts available” at that date, clarifying for such purpose what is meant by annual accounts available:
- For public listed companies, the audited annual accounts referred to in article 41.1.a) of the above Royal Decree-Law 8/2020.
- For all other taxpayers, the audited annual accounts or, failing that, the annual accounts authorised for issue by the relevant body, or, in the absence thereof, the available accounting records kept in line with the provisions of the Commercial Code or that set forth in the regulations by which they are governed.
- Likewise, a second CIT return may be filed once the accounts have been approved in line with the law and the accounting result becomes final and provided the second return differs from that filed previously. The deadline for filing this second return is 30 November 2020 and it shall be subject to the following:
- Where it gives rise to greater tax payable or less tax refundable than that resulting from the first return, the second self-assessment will be considered a supplementary return. Late-payment interest will accrue on the amount payable from the day after the end of the period envisaged in article 124.1 of the CIT Law (25 calendar days after the end of the six-month period immediately following the end of the tax period) but no late-filing surcharges will be generated.
- In all other cases, this second self-assessment will be treated as a rectification of the first return, and will take effect upon filing, with no need for the approval of the tax authorities as it is not subject to the procedure for rectification of self-assessments envisaged in articles 126 et seq of the General Regulations on Tax Management and Inspection Procedures and Proceedings and Implementing the Common Rules on Procedures to Manage, Collect and Inspect Taxes.
- Under no circumstances will the second self-assessment be final and a full inspection may be conducted with respect to the taxpayer’s CIT.
- Moreover, the limits on rectification of the options referred to in article 119.3 of the General Taxation Law 58/2003 of 17 December 2003, which rule out subsequent rectification of the options to be exercised, requested or waived upon filing a return, unless the rectification is filed in the regulatory filing period, will not apply with respect to the new self-assessment.
- Should the second return give rise to tax refundable to the taxpayer, the six-month period for accrual of late-payment interest in favour of the taxpayer shall begin running as of 30 November 2020. Nonetheless, where the rectification of the initial self-assessment gives rise to an amount refundable as a result of an amount effectively paid under the previous self-assessment, late-payment interest shall accrue on such amount for the period running from the day after the end of the voluntary filing period (25 calendar days as from the end of the six-month period immediately following the end of the tax period) and the date on which payment of the refund is ordered.
Amendments of the terms of the non-accrual of late-payment interest for certain tax deferrals.
- The period for which late-payment interest will not accrue in respect of the deferrals regulated in article 14 of Royal Decree-Law 7/2020 of 12 March 2020, adopting urgent measures to address the economic impact of COVID-19, and article 52 of Royal Decree-Law 11/2020 of 31 March 2020, adopting supplementary urgent social and economic measures to address the impact of COVID-19 (Royal Decree-Law 11/2020) is extended to four months.
- Article 14 of Royal Decree-Law 7/2020 provided for the possibility of SMEs and self-employed workers with a volume of business not exceeding Euros 6,010,121.04 in 2019 requesting a six-month deferral - on which no late-payment interest would accrue for the first three months - of all returns and self-assessments with filing deadlines falling between 13 March 2020 and 30 May 2020, provided the applications filed until that date amounted to less than Euros 30,000.
- Final provision seven of Royal Decree-Law 19/2020 amends the terms of the above deferral to extend the late payment interest-free period to four months.
- Likewise, article 52 of Royal Decree-Law 11/2020 provided for more flexible terms for the deferral of debts arising under customs declarations filed between 2 March 2020 and 30 May 2020, inclusive, where the applications filed up to that date were for amounts of less than Euros 30,000 and the amount of the debt to be deferred exceeded Euros 100. These deferrals could be requested by the natural or legal person recipient of the imported goods, provided their volume of business did not exceed Euros 6,010,121.04 in 2019, and where such deferrals were granted for a period of 6 months and accrued no late-payment interest in the first 3 months of the deferral.
- Section 3 of additional provision nine extends the late-payment interest-free deferral period to four months.
- Lastly, a transitional regime is envisaged (transitional provision two of Royal Decree-Law 19/2020) whereby the above amendments will apply, respectively, to deferral applications filed, in the first case, as of 13 March 2020 (date of entry into force of Royal Decree-Law 7/2020) and, in the second case, as of 2 April 2020 (date of the entry into force of Royal Decree-Law 11/2020).
Exceptional delay in the publication in 2020 of the list of tax debtors
- The list of tax debtors meeting the requirements to be included on this list at 31 December 2019 will be published by 1 October 2020 at the latest (as opposed to in the first six months as previously).
Exemption from stamp duty on deeds formalising various moratoriums
- An exemption from stamp duty is envisaged for deeds formalising the moratoriums envisaged in:
- Article 13.3 of Royal Decree-Law 8/2020 on extraordinary urgent measures to address the economic and social impact of COVID-19
- Article 24.2 of Royal Decree-Law 11/2020 of 31 March 2020 adopting supplementary urgent social and economic measures to address COVID-19, and
- The agreement-based moratoriums granted under sector-specific framework agreements adopted as a result of the health crisis triggered by COVID-19, provided for in Royal Decree-Law 19/2020.