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Special Measures Regarding Tax Matters Due to Covid 19

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Recently, the outbreak of COVID-19 took a drastic turn, which has led to a huge change of our everyday lives. Today in Spain, where possible, the Spanish workforce is working from home, affecting markets at every level. In view of the severe situation, the government is currently leaning towards special measures not only in health matters but also in economic matters to mitigate the strain on the economy.

The Spanish government, via the Royal Decree-Law 7/2020 of 12 March (hereinafter RD 7/2020), has approved some tax related measures in order to lessen the impact of the pandemic, that we will proceed to explain in this post. 

TAX PAYMENTS DEFERRAL

According to article 14 RD 7/2020, certain taxpayers will be able to postpone the payment of their taxes, up to a maximum of 6 months. 

1.1. Who can request the deferral?

This possibility of deferral can only be requested by “autónomos” (Consultants or Freelancers) and companies that had a turnover lower than 6.010.121,04 Euros. 

1.2. Which tax returns can be deferred?

This deferral affects only the tax returns that have to be filed between March 13th and May 30th, both included. This means that the payment of the tax returns corresponding to the 1st quarter of 2020 can be postponed, specifically the following:

  • Payments into account of Personal Income Tax (Form 130 and 131)
  • Quarterly VAT return (Form 303)
  • Payments into account of Corporate Income Tax (Form 202)
  • Personal Income Tax Withholdings on Employment and Professionals income (111), on Rental Income (115) and Interests Income (123). 

1.4. Until when will the payment be deferred?

The taxpayer can request the deferral of the payment (remember it is optional), up to 6 months since the official deadline expired. However, only 3 months of the deferral will be interest-free. 

Therefore, in case a taxpayer requests a deferral of 4 months, this taxpayer will only have to pay interests on late payment for one month. 

Remember the annual interest rate on late payments for 2020 is 3.75%.

1.5 Is this decision final?

These measures can be further extended by local tax authorities where the outbreak is particularly serious. The special measures regarding tax matters due to Covid-19 also encourage local tax authorities and taxpayers to deal with tax matters remotely, such as via e-tax bureaus, mobile applications, etc.

 

Closing of Spanish Tax Authorities offices and suspension of deadlines.

Spanish Tax Authorities will be closed during this period. The register to file any request physically, or other personal attention services will be closed. Note that, should you want to file any other request, it can be done through the Spanish Tax Authorities’ website. 

Deadlines to reply to the Spanish Tax Authorities’ requests, allegations, and Spanish Tax Authority processes are suspended. As soon as the Royal Decree stops being in force, the deadlines will start running again. 

Periods of prescription or limitation will be suspended during the state of alert.


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