Regulatory changes introduced by the Government of Spain
On March 17, 2020 and entered into force on March 18 of the same year, the Government of Spain issued Royal Decree-Law 8/2020 of March 17, which contains various extraordinary measures in order to make against the economic and social impact of COVID-19.
With the purpose to face the economic and social impact of COVID-19, reinforcing the protection of workers, families and vulnerable groups, as well as supporting the continuity in the productive activity and the maintenance of employment.
Given the extraordinary situation, coverage is strengthened for workers affected by an “ERTE” (“Expedientes de Regulación Temporal de Empleo”, temporary employment regulation procedures), enabling them to have access to the contributory unemployment benefit, even if they lack the necessary contribution period to have access to it.
For its part, with the aim of reducing the costs incurred by companies, in cases of force majeure regulated in this Royal Decree-Law, the exemption of companies from the payment of 75% of the business contribution to the Social Security, with said exemption reaching 100% of the quota in the case of companies with less than 50 workers, provided that they undertake to maintain employment applies. Until now, only in the cases in which the force majeure derives from natural catastrophic events that suppose the total or partial destruction of the company or workplace preventing the continuity of the activity, the employer could be exonerated from the payment of contributions to the Social Security. Thus, together with the subsidized tax deferral incorporated in Royal Decree-Law 7/2020, of March 12, it contributes to reducing the maintenance cost of companies seriously affected by the stoppage of economic activity due to COVID -19.
In this way, in addition to alleviating the costs incurred by companies, the maintenance of already formed human capital is encouraged. That is, workers who have training for the activity in question and who know the company, they are recovered.
Also, in order to minimize the impact that the exceptional situation could generate to the taxpayers in order to comply with certain tax obligations and tax procedures, fundamentally to meet requirements and formulate allegations in time in tax application procedures, tax penalties and some of them linked with tax review, the deadlines that the taxpayer has, are made more flexible to favour their right to claim and prove and facilitate compliance with the duty to collaborate with the AEAT (Spanish Tax Office) and to provide relevant documents, data and tax information. For these purposes, the suspension of administrative deadlines for the scope of the procedures of public sector entities is agreed.
For this same reason, in order to facilitate the payment of tax debts, the terms for payment are relaxed, both in the voluntary period and in the executive period, as well as the payment derived from the deferral and fractionation agreements.
From B LAW & TAX we will keep you informed about the additional measures that the Government of Spain may adopt, as well as the communications and instructions that the Spanish Tax Administration may issue with an impact on the tax field and on its tax obligations.
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