Latest developments in Spain with special impact on tax matters and tax compliance. Continuing with the reforms introduced during the last three months, and on May 27th, the new Royal Decree Law 19/2020 was published in the Official State Bulletin (BOE) and came into force on the same date of its publication.

Extension of the deadline for not accruing interest on tax deferrals

Regarding taxation, this Royal Decree-Law extends to four months the period for the non-accrual of interests on the deferrals stated in the Article 14 of the Royal Decree Law 7/2020, 12th March, adopting urgent measures in order to deal with the economic impact of COVID-19, which relate to the tax debts of the letters b), f) and g) of the article number 65.2 (LGT), when it comes to withholdings and prepayments, VAT and Corporate Income Tax Instalments over the Corporate Tax, of those taxpayers with a volume of operations that do not exceed 6.010.121,04 euros in 2019. It also has been extended to four months the deferral of custom debts stated in the Article 52 of the Royal Decree Law 11/2020 of the past 31 of March taking additional and urgent social and economic measures to face the current situation with the COVID-19.

Modification of deadlines for approval of the Annual Accounts

As a consequence of the measures established in the Article 40 of Royal Decree Law 8/2020, an extraordinary regulation has been established regarding the deadlines for the formulation, verification and approval of the Annual Accounts of private-law legal entities that are not included in the scope of application of the Article 41, which is part of the abovementioned legal text, that makes reference to listed companies.

With the main objective of providing a certain deadline, the Article 40 of Royal Decree Law 8/2020 has been modified establishing that the three-month period in order to draw up the Annual Accounts and other legally compulsory documents, will start to run from the 1 of June and not by the end of the state of alarm.

In addition, this new rule reduces from three to two moths the period, since the Annual Accounts are formulated, in order to approve them. So that, companies will have their Annual Accounts approved and deposited at the Mercantile Registry earlier, standardizing this aspect for all companies, both listed and not listed. In this way, all companies must have their accounts approved within the first ten months of the financial year.

Filling the Corporate Income Tax Return

Since these modifications of the deadlines directly affect to the obligation of filling the Corporate Income Tax Return established in the Article 12 of the Royal-Decree Law, it empowers those Income Tax payers that have not been able to approve their financial statement prior to the end of the Tax Return Period, to file the return with the Financial Statements available at that time, always under the terms and conditions prescribed by the rule

Therefore, according to this Article 12, those Corporate Income Tax payers, whose deadline for the preparation and approval of the Annual Accounts for the period is in accordance with the established in the Articles 40 and 41 of the Royal Decree Law 8/2020 of 17 March, about urgent and extraordinary measures in order to address the economic and social impact of COVID-19, will present the return of the Tax, for the Tax period that corresponds to the fiscal year, within the period stablished on the section 1 of the Article 124 of the Law 27/2014, November 27th, on Corporate Income Tax. That is, within 25 calendar days from the 6 months after the end of the tax period. If by the end of the mentioned period, the annual accounts have not been approved by the corresponding bodies, the declaration will be made with the available Annual Accounts.

The same Article 12 clarifies what must be considered as Available Annual Accounts:

  1. For listed companies, the audited Annual Accounts referred to in the first section of the Article 41 of the previously mentioned Royal Decree Law 8/2020.
  2. For the rest of the tax payers, the Annual Accounts audited or, in their absence, the Annual Accounts prepared by the corresponding body or, as a last resort in their absence, the available accounting records, always in accordance with the stated in the Commercial Code or by the rules governing them.

Once the final Annual Accounts are approved in accordance with the current law, if they differ from the provisional Annual Accounts on which the first corporate income tax return was filed, a second tax return must be filed. In this case, the deadline is 30 November 2020.

This second declaration must have the status of a supplementary declaration if it results in a higher or lower amount to be paid in than that one previously submitted. However, it will have the status of a rectification of the Tax Return for the rest of the cases.

The amount that has to be paid resulting from the complementary declaration will accrue interests for late payment in accordance with the stablished in the Article 26 of the General Tax Law, from the day following the end of the period (of 25 calendar days following the 6 months following the end of the tax period) without the application of the surcharges established for late declaration in accordance with the provisions of Article 27 of the General Tax Law.

Regarding the cases not included in the previous paragraph, the new self-settlement will produce effect as soon as it is presented, without prejudice of application in what is stablished in the section 3 of the Article 120 of the General Tax Law.

In the case of reimbursement of amounts derivated from the application of the provisions of this article, the Article 127 of the Law 27/2014, November 27th, on Corporate Tax will be applied, it means the repayment within 6 months from the end date of the specified period for the presentation of the Tax return, default interests will be applied if the if it is paid back after the stated 6 moths. In this sense, the six-month period will be counted from the end of the deadline of 30 November 2020 for the submission of the new self-settlement.

If the correction of the self-settlement results in an amount to be returned, as a consequence of a effective income in the previous self-settlement, interests will be accrued over that amount from the day after the end of the voluntary return period of the Tax return as it is stablished in the Corporate Income Tax Law until the date on which the return payment is ordered.

The rule establishes that under no circumstances this second declaration will have preclusive effects and that Corporate Income Tax can be fully supervised and verified by the Aministration bodies.

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Marta Reguera

Marta Reguera
Director Tax Support

Augusto Berutich
Director. Head of Tax

All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.