Extension of public loan guarantees, COVID aid and tax changes

Automatic summary, not yet reviewed

1. If you have a loan backed by a public guarantee, you can ask to extend its term by up to three more years, without exceeding eight years in total. You can also request up to 12 extra months of grace period (not paying principal), with a total maximum of 24 months.
2. Banks must keep, until June 30, 2021, the limits of working capital lines for borrowers with a guaranteed loan who meet the requirements. To request these measures, the loan cannot be in default and the borrower cannot be in insolvency proceedings, and the request cannot be made later than May 15, 2021.
3. Notary and registry fees for formalizing these term extensions are cut in half. If there is a mortgage guarantee, the deeds are exempt from the gradual rate of the tax on documented legal transactions.
4. During 2021, companies and other entities (associations, cooperatives, foundations) can hold their meetings by videoconference or conference call even if their bylaws do not allow it. The secretary must verify the identity of attendees and state it in the minutes.
5. The Medgaz and Magreb-Europa gas pipelines are temporarily exempted for 14 months from certain obligations on activity separation and third-party access. The exemption can be extended if requested at least six months in advance.
6. Until April 30, 2021, the VAT rate is 0% for medical supplies against COVID-19 destined for public entities, hospitals and non-profit entities. The list of products is in the annex of the law.
7. Disposable surgical masks for other buyers are taxed at a 4% VAT instead of 21%, until December 31, 2021.
8. An extra 6 billion euros is approved for Social Security and 2.3 billion euros for the Public State Employment Service, to pay benefits and unemployment subsidies. Both amounts are financed with public debt.

Who it affects

• Self-employed people and companies with ICO-guaranteed loans: They can request longer repayment terms, more grace period and keep their working capital lines if they meet the requirements.
• Companies, associations, cooperatives and foundations: During 2021 they can hold their meetings by videoconference even if their bylaws do not say so.
• Public entities, hospitals and non-profit entities: They buy medical supplies against COVID-19 with 0% VAT until April 30, 2021.
• Consumers: Disposable surgical masks carry a reduced 4% VAT.
• Anyone with pesetas still to exchange: They can exchange them at the Bank of Spain until June 30, 2021.

Words worth knowing

Aval público (public guarantee)

A State guarantee: if the borrower does not pay, the State answers to the bank.

Carencia (grace period)

A period in which only interest is paid and the loan principal is not repaid.

Línea de circulante (working capital line)

Money the bank makes available to the client for everyday business expenses.

Concurso de acreedores (insolvency proceedings)

A court procedure for a company or person unable to pay their debts.

IVA (VAT)

Value Added Tax: paid when buying goods or services.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries