As a result of the exceptional state we are in due to the spread of Covid-19, the Spanish Government has approved certain transitional financial support measures. Among these measures, those on tax matters are as follows:
Tax Debt Deferral for SMES and Self-Employed
The Official State Gazette (BOE in Spanish) on 13th March published Spanish Royal Decree-Law 7/2020 (Real Decreto Ley 7/2020) of 12th March, adopting urgent measures to respond to the economic impact of the Covid-19. This law allows SMEs and the self-employed to defer their debts without guarantees for a period of six months, with subsidised interest.
This is a transitional financial support measure in the field of state taxation and consists of allowing the deferral of tax payments for a period of 6 months, if it has been requested beforehand and with interest rate subsidies for the deferral.
This deferral is regulated in Article 14 of the Real Decreto Ley, establishing the possibility of requesting the deferral of the payment of the following tax debts:
- Tax debts arising from those tax return and self-assessments for which the deadline for presentation and payment is from 13th March 2020 to 30th May 2020, provided that the amounts of the tax debt up to that date are less than 30,000 euros.
- Tax debts which, in principle, cannot be deferred in accordance with Article 65.2 of the Spanish general tax law (Ley General Tributaria), which are the following
- debts arising from withholdings and payments on account
- taxes levied and
- instalments of corporation tax.
In order to be able to request the deferment, it is essential that the person or entity has a volume of operations in the financial year 2019 that does not exceed 6,010,121.04 euros
The period of deferment shall be 6 months, no interest on arrears being accrued during the first 3 months of the deferment.
In order to grant the deferment, the requirements referred to in Article 82.2.a) of the Spanish general tax law (Ley General Tributaria) must be met. This article establishes that tax debts that are lower than the amount established in the tax regulations may be deferred with total or partial waiver of guarantees. This amount is currently set at 30,000 euros.
This measure comes into force on the day of publication of this Royal Decree Law in the BOE, i.e. 13 March 2020. The Spanish Tax Agency (AEAT) has published on its website provisional instructions for the request of deferrals in accordance with this Real Decreto Ley.
Suspension and Extension of Deadlines in Tax Procedures
One of the other tax measures approved in this exceptional situation is the suspension and extension of deadlines in tax proceedings. In this case, the measure is included in the Real Decreto 463/2020 which declares the state of alarm in order to manage the health crisis situation due to the Covid-19. It was published in the BOE on 14 March and came into force for a period of 15 calendar days, in other words, until 30 March, notwithstanding the fact that it can be extended.
This Real Decreto, in its third and fourth additional provisions, contains rules applicable to tax procedures.
The third additional provision establishes that the terms are suspended and the processing deadlines for all procedures of public sector entities are interrupted, which will also be resumed when the Real Decreto or its extensions, if any, are no longer in force.
This suspension and interruption will affect the entire Public Sector, that is, the General State Administration, the Administrations of the Autonomous Communities, the Local Administration Entities and the institutional public sector. Likewise, it is foreseen that the corresponding administrative body may agree, with reasons, on the measures it considers necessary to avoid serious damage to the rights and interests of the interested parties in the procedures, provided that they express their agreement with these measures or that the deadline is not suspended.
This shall not affect proceedings and decisions relating to situations closely linked to the events that justified the state of alert. On the other hand, the fourth additional provision declares the suspension of the periods of limitation and expiration of any actions and rights during the validity of the state of alert or extensions where appropriate.