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.
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.
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.