What state aid is available for companies during Spain’s coronavirus crisis?

Prime Minister Pedro Sanchez's leftist government on Friday banned job dismissals during the pandemic, a step demanded by unions which warned that up to one million people risked losing their jobs.

What state aid is available for companies during Spain's coronavirus crisis?
Empty streets in Barcelona during the coronavirus lockdown.Photo: AFP

The government has also taken the step of preventing all workers from leaving home unless they are involved in “essential work”.  

So what help is the government offering? The Local asked lawfirm Gutierrez Pujadas & Partners to help clarify. 

The measures recently approved by the Spanish Government to assist companies within the context of the COVID-19 crisis are focused three things; guaranteeing the liquidity of companies, temporarily reducing labour costs through ERTEs (Temporary Layoffs) and defering taxes or suspending tax deadlines.

Measures to guarantee the liquidity of companies

Various liquidity guarantee measures have been established to support the economic activities of companies faced with temporary challenges caused by the COVID-19 crisis, in a bid to ensure companies can remain in operation and prevent a temporary liquidity problem becoming an issue of solvency.

  • Companies will be able to count on a state guarantee when requesting loans from private banks.
  • Said loans will be processed through financial bodies, so companies should get in touch with the relevant bank to obtain further information.
  • For this purpose, the Government has approved the creation of a series of public guarantees up to a value of €100 billion, which will enable the mobilisation of between 150 and 200 billion euros.
  • The State will act as a guarantor for the transactions.

Measures to temporarily reduce labour costs for companies:

  • The Government has made application procedures easier and more flexible for companies to obtain authorisation for an ERTE (Temporary Layoffs), which consists of filing for the suspension of contracts and the temporary reduction of working days.
  • Companies with less than 50 employees will not be obliged to pay Social Security contributions during the ERTE period.
  • Companies with 50 or more employees will only pay 25 percent of Social Security contributions during the ERTE period.

Tax measures

More measures are expected to be clarified within the area of taxation, but for the moment the most relevant are focused on deferments for small and medium-sized enterprises (SMEs) and the self-employed, leaving aside larger companies.  Tax deadlines have also been suspended to guarantee legal protection for liable taxpayers.

Six-month tax deferment for SMEs

A deferment (or moratorium) has been approved for tax payments by SMEs and the self-employed.

  • SMEs and the self-employed will be able to postpone tax payments, including income tax withholdings, VAT accruals and corporation tax instalments.
  • The deferment (or moratorium) has been granted for a period of six months.
  • No interest on arrears will be accrued for the first three months.
  • For more information and/or applications, please feel free to get in touch with Gutierrez Pujadas & Partners.

Suspension of tax deadlines

In recognition of the problems that may be posed to liable taxpayers due to the exceptional situation caused by the COVID-19 crisis in terms of fulfilling certain tax obligations and completing tax-related procedures, essentially to allow time to respond to requests and make claims for tax application procedures, deadlines have been extended to 30 April or 20 May, depending on the procedure in question. 


More info:

Summary of the economic measures in the Spanish Royal Decree-Law 8/2020, of 17 March

Royal Decree-Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of COVID-19

Royal Decree 463/2020, of 14 March, declaring a state of emergency to manage the health crisis caused by the coronavirus (COVID-19) in Spain

Information provided by Gutierrez Pujadas & Partners, an international firm with a boutique mindset, specializing in international taxation, family offices and holding companies. To consult with their expert team contact them HERE.


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Spain rules out EU’s advice on compulsory Covid-19 vaccination 

Spain’s Health Ministry said Thursday there will be no mandatory vaccination in the country following the European Commission’s advice to Member States to “think about it” and Germany’s announcement that it will make vaccines compulsory in February.

Spain rules out EU's advice on compulsory Covid-19 vaccination 
A Spanish man being vaccinated poses with a custom-made T-shirt showing Spain's chief epidimiologist Fernando Simón striking a 'Dirty Harry/Clint Eastwood' pose over the words "What part of keep a two-metre distance don't you understand?' Photo: José Jordan

Spain’s Health Minister Carolina Darias on Thursday told journalists Covid-19 vaccines will continue to be voluntary in Spain given the “very high awareness of the population” with regard to the benefits of vaccination.

This follows the words of European Commission chief Ursula von der Leyen on Thursday, urging Member States to “think about mandatory vaccination” as more cases of the Omicron variant are detected across Europe. 

READ ALSO: Is Spain proving facts rather than force can convince the unvaccinated?

“I can understand that countries with low vaccine coverage are contemplating this and that Von der Leyen is considering opening up a debate, but in our country the situation is absolutely different,” Darias said at the press conference following her meeting with Spain’s Interterritorial Health Council.

According to the national health minister,  this was also “the general belief” of regional health leaders of each of Spain’s 17 autonomous communities she had just been in discussion with over Christmas Covid measures. 

READ MORE: Spain rules out new restrictions against Omicron variant

Almost 80 percent of Spain’s total population is fully vaccinated against Covid-19, a figure which is around 10 percent higher if looking at those who are eligible for the vaccine (over 12s). 

It has the highest vaccination rate among Europe’s most populous countries.

Germany announced tough new restrictions on Thursday in a bid to contain its fourth wave of Covid-19 aimed largely at the country’s unvaccinated people, with outgoing Chancellor Angela Merkel speaking in favour of compulsory vaccinations, which the German parliament is due to vote on soon.

Austria has also already said it will make Covid-19 vaccines compulsory next February, Belgium is also considering it and Greece on Tuesday said it will make vaccination obligatory for those over 60.

But for Spain, strict Covid-19 vaccination rules have never been on the table, having said from the start that getting the Covid-19 jabs was voluntary. 

There’s also a huge legal implication to imposing such a rule which Spanish courts are unlikely to look on favourably. 

Stricter Covid restrictions and the country’s two states of alarm, the first resulting in a full national lockdown from March to May 2020, have both been deemed unconstitutional by Spain’s Constitutional Court. 

READ ALSO: Could Spain lock down its unvaccinated or make Covid vaccines compulsory?

The Covid-19 health pass to access indoor public spaces was also until recently consistently rejected by regional high courts for breaching fundamental rights, although judges have changed their stance favouring this Covid certificate over old Covid-19 restrictions that affect the whole population.

MAP: Which regions in Spain now require a Covid health pass for daily affairs?

“In Spain what we have to do is to continue vaccinating as we have done until now” Darias added. 

“Spaniards understand that vaccines are not only a right, they are an obligation because we protect others with them”.

What Spanish health authorities are still considering is whether to vaccinate their 5 to 11 year olds after the go-ahead from the European Medicines Agency, with regions such as Madrid claiming they will start vaccinating their young children in December despite there being no official confirmation from Spain’s Vaccine Committee yet.

READ MORE: Will Spain soon vaccinate its children under 12?

Spain’s infection rate continues to rise day by day, jumping 17 points up to 234 cases per 100,000 people on Thursday. There are now also five confirmed cases of the Omicron variant in the country, one through community transmission.

Hospital bed occupancy with Covid patients has also risen slightly nationwide to 3.3 percent, as has ICU Covid occupancy which now stands at 8.4 percent, but the Spanish government insists these figures are “almost three times lower” than during previous waves of the coronavirus pandemic.