Pandemic aid for business leases, taxes and jobs

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1. The bill would let self-employed workers and small businesses that rent business premises ask the landlord for a 50% rent cut or a payment deferral while the state of alarm lasts, and up to four more months, if the parties have not already reached an agreement. It only applies when the landlord is a company, a public entity or a large landlord (more than 10 urban properties or more than 1,500 m² built).
2. If the landlord is not a large landlord, a tenant who meets the requirements could request a temporary and extraordinary deferral of rent payments, and the parties could use the security deposit to pay some monthly payments, with an obligation to replace it within one year.
3. To access these rent measures, the self-employed person or small business must have its activity suspended by the state of alarm or show a drop in revenue of at least 75% compared with the same month of the previous year. Anyone who benefits without meeting the requirements will be liable for the damages and costs caused.
4. Companies in sectors such as beverage wholesale, restaurants, bars, zoos and gambling with furlough schemes (ERTEERTE Expediente de Regulación Temporal de Empleo: a temporary furlough scheme where the company suspends or reduces employees' work and they can claim unemployment benefits.) extended until January 31, 2021 would be exempt from part of their Social Security contributions: 85% if they have fewer than 50 workers and 75% if they have 50 or more.
5. On taxes, payment of tax debts whose filing and payment deadline falls between April 1 and April 30, 2021 could be deferred for six months, for debtors with a turnover not exceeding €6,010,121.04 in 2020, with no late-payment interest during the first three months.
6. The reduction of net income under the objective estimation method of personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPF) for 2020 would rise from the 5% previously provided to 20% in general and 35% for tourism, hospitality and retail activities. A parallel 20% or 35% reduction would apply to the tax due under the simplified VAT scheme.
7. Days of the 2020 state of alarm and days of activity suspension due to health measures would not count as periods of activity for IRPF and VAT module purposes, nor for the corresponding installment payments. Renouncing the objective estimation method would also be made more flexible, allowing taxpayers to return to it in 2021 or 2022.
8. Landlords who voluntarily cut the rent from January to March 2021 for businesses in affected sectors could deduct that reduction as an expense in their personal income tax. In addition, the VAT on COVID-19 vaccines, on in vitro diagnostic tests and on their transport and distribution would be 0% until December 31, 2022.

Who it affects

• Self-employed workers and small businesses renting business premises: Could request rent cuts or deferrals if their activity is suspended or their revenue drops by 75%.
• Landlords of business premises: Could be required to accept cuts or deferrals if they are large landlords, or benefit from deductions if they voluntarily cut the rent.
• Tourism, hospitality and retail companies with furlough schemes (ERTE): Could be exempt from part of their Social Security contributions.
• Self-employed workers and small businesses taxed under the modules system: Would get reductions in personal income tax and VAT and could defer tax debts.
• People who exhausted unemployment benefits between March and June 2020: Would have a new one-month window to apply for the special unemployment subsidy.

Words worth knowing

ERTE

Expediente de Regulación Temporal de Empleo: a temporary furlough scheme where the company suspends or reduces employees' work and they can claim unemployment benefits.

Método de estimación objetiva

Objective estimation method: a way for the self-employed to calculate income tax using fixed indexes (modules) instead of actual income and expenses.

Gran tenedor

Large landlord: a person or entity owning more than 10 urban properties (excluding garages and storage rooms) or more than 1,500 m² of built space.

Pago fraccionado

Installment payment: a quarterly advance payment of tax made by the self-employed and companies against the annual return.

Recargo de equivalencia

Equivalent surcharge: a system where certain retailers pay VAT on their sales through their supplier instead of filing it themselves.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries