Covid-19 coronavirus: what tax measures have been adopted under the state of alarm in Spain?
19 March 2020
The measures have a double purpose, (i) on the one hand, to adapt the resolution of disputes against the Spanish Administration to this new scenario and, (ii) on the other hand, to try to mitigate the undoubted adverse effects that this situation may produce in the Spanish economy, affecting not only the business environment but also all the families that are confined to their homes. However, and unfortunately for the taxpayer, the recent publication of Royal Decree 465/2020, of 17 March (RD 465/2020), amending RD 463/2020, has clarified the scope of the suspension of administrative proceedings of tax nature excluding from its application the deadlines of tax returns.
Other set of tax measures have been adopted by the Government through the publication of Royal Decree Law 7/2020, of 12 March, which adopts urgent measures to respond to the economic impact of COVID-19 (RDL 7/2020) and of Royal Decree-Law 8/2020 of 17 March on urgent extraordinary measures to deal with the economic and social impact of COVID-19 (RDL 8/2020).
At this stage and from a purely informative point of view, the following is a compilation of the provisional tax measures adopted as a result of the state of alarm declared in the Kingdom of Spain. The different regional governments are also approving tax measures affecting its own taxes, some of which have been included herein. Further information to follow in the coming days.
Suspension of tax judicial and administrative proceedings terms
According to RD 463/2020, terms will be suspended and periods will be interrupted in tax proceedings held both before judicial courts and Spanish administration.
However, in the case of judicial proceedings the judge or court may agree to conduct any judicial actions that are necessary to avoid irreparable damage to the rights and legitimate interests of the parties. Deadlines will be reopened at the moment that RD 463/2020 or, if applicable, any extension thereof duly approved by the Spanish Parliament, is no longer in-force.
As anticipated, the suspension of tax administrative proceedings will not apply to tax deadlines, which are subject to special regulations, nor will affect, in particular, the deadlines for submitting tax returns ("autoliquidaciones"). In this sense, there will be no alteration in (i) the voluntary period for submitting tax returns; (ii) the deadline for complying with other tax obligations (e.g. withholding taxes and other payments on account, prepayments...); (iii) or the deadline for filing information tax returnss (e.g. Form 720). Notwithstanding, if the requirements set out below and foreseen in RDL 7/2020 are met, a potential deferral in the payment of the tax due may apply.
Suspension of tax statute limitation period
The tax statute limitation period will be suspended during the in-force period of the state of alarm and, where appropriate, any extensions adopted.
Extension of certain tax deadlines
RDL 8/2020 has established certain flexibility by extending the deadline of a limited number of tax debts payment deadlines (which as anticipated does not cover payment of taxes due under ordinary tax returns), both in the voluntary period ("periodo voluntario") and in the enforcement period ("periodo ejecutivo"). It has also established an extension in the payment of tax debts derived from authorised tax ("acuerdos de aplazamiento y fraccionamiento"). In this regard, such opened (or not yet opened) payment deadlines will be extended to 30 April 2020 or 20 May 2020 when applicable. The same treatment will be applicable to those granted periods to submit claims or allegations within the course of certain administrative proceedings.
The Spanish tax authorities have published certain guidelines explaining the concrete application of this extension.
Deferral in the payment of taxes
In accordance with the provisions foreseen in RDL 7/2020, a deferral in the payment of taxes not exceeding €30,000 will be granted when the deadline for filing the tax return and paying the tax due is between 14 March 2020 and 30 May 2020 (both inclusive). This deferral shall also be applicable to tax amounts derived from the obligation to file withholding taxes and other payments on account or prepayments. The only requirement to be met by the relevant debtor (entity or individual entrepreneur) is that its turnover did not exceed €6,010,121.04 in fiscal year 2019. If the deferral is granted, the new payment period will be extended for 6 months, with no late-payment interest accruing during the first three months.
Stamp Duty exemption applicable to mortgage loans amendments
Public deeds formalizing amendments to mortgage loans conducted as a result of the measures introduced by RDL 8/2020 (in particular, the moratorium on mortgage payments affecting certain mortgage loans) will be exempt from Stamp Duty Tax ("Impuesto sobre Actos Jurídicos Documentados").
The Government of Andalucía has approved the Decree-Law 3/2020, of 16 March, of measures for financial and tax support to the economic sector, streamlining administrative actions and social emergency measures, to tackle the effects of COVID-19 (DL 3/2020).
This DL 3/2020, which entered into force on 17 March 2020, includes, among other, the following main tax measures:
- the deadline to submit and pay the Inheritance and Gift Tax ("Impuesto sobre Sucesiones y Donaciones") and the Transfer Tax, Capital Duty and Stamp Duty ("Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados") for those self-assessments whose term ends between 17 March 2020 (date of entry into force of DL 3/2020) and 30 May 2020 (included), will be extended for 3 additional months; and,
- the deadline to submit self-assessments and pay public law debts which were due during the period of the state of alarm (declared by RD 463/2020) will be extended until the same day of the month following their due date.
The Government of Cataluña has approved the Decree-Law 7/2020, of 17 March, on urgent measures in public procurement, health and management of medical waste, transparency, public transport and in tax and economic matters, which entered into force on 19 March 2020 and whose main tax measure introduced is the suspension of all the deadlines for filing and payment of Cataluña's taxes and of those taxes assigned and collected by Cataluña until the state of alarm (declared by RD 463/2020) ends.
The Government of Vizcaya has approved the Foral Decree-Law 1/2020, of 17 March, of urgent tax measures derived from COVID-19, which has introduced the following tax measures, with effects as from 16 March 2020:
Suspension or postponement of periods in certain tax proceedings
- The initiation of tax proceedings which, according to tax regulations, must be initiated by the Tax Authorities from 16 March 2020, will be suspended until 1 June 2020.
- However, the foregoing shall not be applicable to certain proceedings, such as penalty proceedings or seizures.
- The voluntary period for filing of tax returns or appeals, when submission by electronic means is not legally mandatory, will be extended until 1 June 2020 if such period ends before.
- The voluntary period for filing and payment of tax returns corresponding to February, when submission by electronic means is legally mandatory, will be extended until 14 April 2020.
- The periods for voluntary payment ending on or after 16 March 2020 granted for the payment of tax dues will be extended 15 natural days.
- In case tax debts are not dully paid within the relevant voluntary period, the subsequent enforcement period will not be initiated until 1 June 2020.
Suspension of tax proceedings
- The period between 16 March 2020 (or the date in which the tax proceeding was stalled) and 1 June 2020, will not be computed within the resolution period for the relevant tax proceeding.
- The period between 16 March 2020 and 1 June 2020 granted for complying with information or documentation enquiries will be suspended.
- No late-payment interest will be accrued in certain proceedings throughout the period between 16 March 2020 and 1 June 2020.
Deferral in the payment of certain taxes
- Deferrals in the payment of taxes derived from the economic activity of individual entrepreneurs or small entities will be granted (with no warranty requested) when the deadline for filing the tax return and/or paying the tax due is between 16 March 2020 and 1 June 2020.
- In those cases in which a deferral in the payment of taxes has already been granted, the instalment corresponding to March will be deferred for one month together with the rest of the pending instalments with no late-payment interest being accrued.
Payments on account
Tax payers subject to Personal Income Tax will be exempt from making payments on account corresponding to the first and second quarter of 2020.
The Government of Navarra has approved the Foral Decree-Law 1/2020, of 18 March, of urgent tax measures to tackle the impact generated by the health crisis of COVID-19, which has introduced the following tax measures, with effects as from 19 March 2020:
- The period between 19 March 2020 and 1 June 2020, will not be computed within the resolution period for the relevant tax proceeding, although the Tax Authorities may carry out during such period any essential acts.
- Periods for paying taxes which were not ended by 19 March 2020 will be extended to 30 April 2020. In those cases in which paying periods are initiated after 19 March 2020, these will be extended, at least, to 30 May 2020.
- In those cases in which a deferral in the payment of taxes has already been granted, the instalment corresponding to March will be deferred one month, as well as the rest of the pending instalments.
- The tax statute of limitation period will be suspended during the period between 19 March 2020 and 30 April 2020.
- Periods for filing tax returns and payment of tax dues corresponding to February, March, as well as the first quarter of 2020, will be extended to 30 April 2020.