Government allows SMEs and independent contractors to defer tax returns due in April until May

Moncloa Palace, Madrid

The Council of Ministers approved a Royal Decree-Law that extends until May the deadline for the presentation and payment of tax returns and self-assessments for SMEs and independent contractors that usually make them in April.

The new legislation establishes that those that invoice up to 600,000 euros may defer the presentation of the quarterly VAT return, the Corporate Income Tax payment on account and Personal Income Tax until 20 May. In the case of direct debited returns, the deadline is also extended by one month from 15 April to 15 May. Regardless of the time of the presentation, all accounts will be charged on 20 May, which also includes those returns presented prior to 15 April.

The Minister for the Treasury and Government Spokesperson, María Jesús Montero, argued that this measure "will facilitate compliance with tax obligations whilst allowing liquidity to be injected into all our companies", specifically up to 2.56 billion euros. María Jesús Montero calculated that this could benefit some 3.4 million taxpayers, or 95% of all SMEs and independent contractors which, in turn, comprise the lion's share of Spain's productive fabric.

María Jesús Montero recalled that SMEs and independent contractors can also defer payment of their taxes for up to the sum of 30,000 euros over six months, without paying interest in the first three months, and announced that the government will soon approve that those independent contractors which pay tax by modules will be able to sign up to the direct estimate tax system.

Balance of measures

Pool Moncloa/JM CuadradoThe Government Spokesperson announced the figures on the results of the measures implemented so that companies that have serious liquidity problems can address their obligations and remain afloat during this health emergency.

As regards the ICO [Official Credit Institute] credit line guarantees, she highlighted that 48,542 operations have already been approved, which has meant State support for the sum of 4.74 billion euros, which is expected to extend to 1.3 million companies.

The Social Security system has also recorded 941,000 applications to receive the provision for cessation of activity or a drop in 75% of turnover. "Almost 780,000 independent contractors have received approval and will receive this benefit on Friday", explained María Jesús Montero.

As regards the deferral of National Insurance contributions for employees, 63,766 companies have signed up for this, affecting more than 807,000 workers and 28,619 independent contractors.

In turn, 396,000 independent contractors and companies are exempt from paying their employees' National Insurance contributions which are affected by a Temporary Lay-off Plan (Spanish acronym: ERTE), while another 36,048 workers, who have contracted the virus or are in quarantine, are receiving occupational disease sick pay.

The Minister for the Treasury considered that these figures show that the measures are up and running and are proving satisfactory to "provide many citizens with greater income, many companies with greater liquidity and to strengthen our SMEs and independent contractors".

Guarantees to facilitate payment of rent

The government agreed to modify the limits on spending charged to future years of the Ministry of Transport, Mobility and Urban Agenda, which will allow it to develop a line of guarantees aimed at facilitating the payment of rent for tenants in vulnerable situations as a result of COVID-19.

María Jesús Montero pointed out that the amount could rise to 1.2 billion euros and these loans could benefit some 450,000 families, thus complementing other measures approved to avoid evictions and to protect tenants.

The minister explained that the government is working "so as not to leave anyone behind", and as regards guaranteeing the energy supply, she highlighted the increase in the number of beneficiaries of the electricity voucher, which exceeds more than 1.3 million homes, and the thermal voucher, which 17,000 people have signed up to since the declaration of the state of emergency. In addition, 70,000 households have signed up to the electricity voucher, which is automatically extended in the event that it runs out during this crisis until 15 September.

We are flattening the curve

Pool Moncloa/Borja Puig de la BellacasaThe Minister for Health, Salvador Illa, highlighted that citizens are complying with the "drastic, strict and demanding" measures contained in the state of emergency decreed by the government on 14 March in an exemplary fashion.

Salvador Illa claimed that, one month on, the figures on the daily spread of the pandemic in Spain show that the curve of contagions is being flattened. "We hit the peak some days ago and the figures we have been seeing this week confirm that we are flattening the curve".

However, the minister reiterated that we are still on lockdown and that the de-escalation has not yet begun. The government, he explained, is acting with "maximum prudence" and studying with regional leaders how and when to ease up some of the measures adopted.

The Minister for Health claimed that workers in non-essential activities who have resumed their activity after the period of recoverable paid leave finalised, are complying with the government's recommendation to maintain the recommended distance between people and use a face mask when this is not possible. Their return has taken place normally and without noteworthy incidents.

He also thanked business organisations and trade unions for dialogue with the government to achieve this and to adopt measures to protect health and prevent risks in work centres.

Equality and cohesion in diagnostic tests

The minister recalled that the Official State Gazette published an Order on Tuesday which seeks to ensure that diagnostic tests to detect those who test positive for the coronavirus are performed, under criteria of "equality and cohesion", through a single network headed up by the regional health authorities.

This Order, he specified, places all private establishments that may perform clinical diagnosis under the jurisdiction of the regional health authorities.

The instruction to perform a diagnostic test must be prescribed by a doctor. The minister announced that the people who will have priority are those displaying minor symptoms and those belonging to high risk groups or are vulnerable, for example those in care homes for the elderly.

The new legislation contains the possibility that the health authorities regulate an economic benefit as consideration for carrying out these tests and the obligation for the regional authorities to pass on this information to the Ministry of Health.

Salvador Illa also reported that any public or private entity that acquires test kits to perform diagnostic testing must notify their corresponding regional health authority with an express indication of the material acquired.

Essential to maintain lockdown

Pool Moncloa/JM CuadradoThe Government Spokesperson reiterated her gratitude to Spanish society for "its high degree of responsibility and civic spirit" in complying with the lockdown and insisted that it is essential to continue making an effort to stay at home because "the social distancing measures and hygiene practices to be strictly followed are what are helping contain the spread of the virus and save lives, which is our priority".

María Jesús Montero argued that gaining time allows health professionals to work under better conditions and scientists to learn more about COVID-19 to find an effective treatment or vaccine.

The minister also highlighted the coordination and cooperation with the regional authorities and between the law enforcement agencies, National Police, local police forces and Civil Protection in handing out face masks so that those workers that use public transport for travelling to work can use them as a complementary protective measure.

Agreement for social and economic reconstruction of Spain

The Government Spokesperson announced that the President of the Government, Pedro Sánchez, will hold bilateral meetings on Thursday and Friday with all the political formations with the aim of achieving a great pact that enables Spain to undertake a socio-economic reconstruction. "After defeating this global pandemic, we must start to rebuild tomorrow's prosperity", she said.

The interviews will begin with the leader of the opposition, Pablo Casado, and will continue with the rest of the parties in the Lower House, from greater to lesser representation.

The Government Spokesperson called for political leaders to attend these meetings with "a constructive spirit and to lend a hand", in order to show people that their public servants are prepared to work together.

The Government Spokesperson also plans to speak with representatives of the regional governments and local authorities, as well as with business leaders, trade unions and civil society.

Non official translation