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COMPANY-DIRECTOR SELF-EMPLOYED:
Regarding the benefits announced for self-employed workers, we are seeing that the Mutual Insurance Companies are also accepting applications from company-director self-employed workers, in addition to those with a professional activity. We will be subject to the relevant decisions, but for the time being this is the operating procedure.
If you are a company-director self-employed worker whose corporate activity has been suspended due to force majeure, this is grounds to attempt the application.
The only individuals whose applications are not accepted are those who were already receiving a prior benefit, for example partial retirement.
COVID-19 SUPPORT FOR SELF-EMPLOYED WORKERS:
CATALAN GOVERNMENT GRANT OF UP TO €2,000:
TAX UPDATES:
- Administrative deadlines for the FILING OF TAX RETURNS AND SELF-ASSESSMENTS have not changed:
First-quarter 2020 taxes continue to have the usual filing deadline of 1 to 20 April, so we will need you to provide us with your details in the usual way, by electronic means, so that we can prepare your self-assessments. We ask that you do so as promptly as possible.
- If you are involved in any process with ADMINISTRATIVE DEADLINES still running as of 18/03, please contact the tax team, as those deadlines have been extended.
- Option to DEFER TAX DEBTS (returns and self-assessments) with a filing deadline falling between 13/03 and 30/05:
All returns and self-assessments for Q1 2020 (as well as the monthly filings for March, April and May) may be deferred, including those for which deferral was previously not permitted (Personal Income Tax (IRPF) withholdings, Corporate Income Tax instalment payments).
Tax payments of up to €30,000 may be deferred for 6 months, with the first 3 months interest-free.
To be eligible, the applicant must have invoiced less than €6 million in 2019.
SUPPORT FOR BUSINESS ACTIVITY:
At the level of BUSINESS ACTIVITY we would like to inform you about the extraordinary cessation-of-activity benefit for self-employed workers:
It will be possible to apply for a CESSATION-OF-ACTIVITY BENEFIT for self-employed workers, provided that the activity carried out is among those expressly suspended (click this link to download the attached document 1), or, even if it does not appear on that list, provided that a reduction of at least 75% in turnover can be demonstrated compared to the average turnover of the previous six months.
While media reports have widely stated that up to €2,000 can be received under this benefit, the actual amount payable is 70% of the so-called regulatory base, which is closely linked to the monthly Social Security contribution being paid.
If you are contributing at the minimum rate (as around 80% of self-employed workers in Spain do), your regulatory base is approximately €945, meaning the benefit received would amount to €661. (Click this link to download a document explaining this benefit in greater detail and with full precision (see attached document 2).
This benefit can be applied for once the month of March has ended and will cover that month. Applications are processed through the mutual insurance entity (mutua) of each self-employed employee, using forms that have already been made available for this purpose.
The employment law measures governing any TEMPORARY WORKFORCE ADJUSTMENT PROCEDURES that companies or business owners may need to initiate in light of current circumstances are being managed and handled by our employment law department. This department will be able to provide specific guidance on any requirements you may have in this regard.
Many of these procedures can be completed online. However, you are welcome to contact David Gombau, Eva Serra or Luisa Fernández for tax-related matters, or Cyrielle Agut for any queries relating to Social Security procedures.
We will continue to keep you informed as further developments emerge. We wish you good health and resilience as we all work together to get through this challenging situation.
COVID-19 FINANCIAL SUPPORT MEASURES:
LEGISLATION:
Link to the legislation 18/03/20 Royal Decree – Act 8/2020 on extraordinary urgent measures to address the impact of COVID-19
Guidelines for the application of COVID-19 support measures.
6-month deferral on Social Security contributions:
Where business activity has not been suspended (see link for force majeure scenarios), a six-month, interest-free deferral is available to companies and self-employed worker (autonomo) workers registered under any Social Security scheme.
- For companies: Covering joint collection contributions for April, May and June 2020.
- For self-employed workers: Covering collection contributions for May, June and July 2020.
Requirements for the Covid-19 Social Security contribution moratorium for self-employed workers and companies:
The requirements will be established by Ministerial Order from the Ministry of Inclusion, Social Security and Migration, subject to prior agreement by the Government's Delegated Committee for Economic Affairs.
How to apply for the Covid-19 Social Security contribution moratorium for self-employed workers and companies:
- For companies: through the RED System (Spain's online Social Security filing platform), submitting individual applications for each contribution account code (C.C.C.).
- For self-employed workers: through the RED System or via the electronic channels available on the electronic office of the State Secretariat for Social Security (SEDESS).
The Treasury may make alternative communication channels available at a later date.
Get in touch and we will guide you through the process:
WHEN TO SUBMIT YOUR APPLICATION FOR THE COVID-19 CONTRIBUTION MORATORIUM:
- Companies: Must notify the Treasury of their application within 10 days of the payment month they wish to defer.
- Self-employed workers: Must notify the Treasury of their application within 10 days of the payment month they wish to defer.
WHEN WILL I RECEIVE A DECISION ON MY COVID-19 CONTRIBUTION MORATORIUM APPLICATION:
Approval of the moratorium will be communicated within three months of the application date. However, it will be deemed to have been communicated once the Treasury applies the moratorium to the contribution settlements processed from the date the application was submitted.
EXCLUSIONS:
Companies and self-employed workers that have obtained contribution exemptions by taking advantage of a Temporary Layoff Procedure (ERTE) involving suspension of activity or reduced working hours on grounds of Covid-19 force majeure.
Deferral of debts owed to Social Security.
Companies and self-employed workers, provided they have no other deferral currently in force, may apply to defer payment of their Social Security contributions for the months of March, April and May 2020, at an interest rate of 0.5%.
Deferral applications must be submitted within the first ten calendar days of the statutory payment deadline (April, May and June) (we understand these to be days, although there is a drafting error in Article 37 of the Spanish Official Gazette (BOE) which omits the word "days"...)
