Pandemic aid for business leases, taxes and jobs

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1. Self-employed people and small and medium-sized companies that lease business premises can ask their landlord, before January 31, 2021, for a 50% rent cut or a payment deferral if the landlord is a large holder (more than 10 urban properties or more than 1,500 m2). If there is no agreement, they can request a deferral. Their activity must be suspended or their revenue must have dropped by at least 75%.
2. The requirements are proven with a sworn statement and, where applicable, a certificate of business closure. Those who benefit without meeting the requirements are liable for damages and costs. The measure does not apply if the landlord is in bankruptcy proceedings.
3. Companies in beverage wholesale, restaurants, bars, botanical gardens and zoos, and gambling, with furlough schemes extended to January 31, 2021, are exempt from part of their Social Security employer contributions: 85% if they have fewer than 50 workers and 75% if they have 50 or more.
4. Small companies and self-employed people with operations of up to €6,010,121.04 can defer tax debts whose returns are filed between April 1 and April 30, 2021. The deferral lasts six months, with no late-payment interest during the first three.
5. For 2020, the simplified tax regimes for self-employed people (IRPF estimated income and simplified VAT) get reductions of 20% in general and 35% for tourism, hospitality and retail activities. Days of state of alarm or suspended activity do not count as days of activity, and switching in and out of these regimes is made more flexible.
6. Landlords who voluntarily cut the rent for January to March 2021 for businesses in affected sectors can deduct that cut as an expense in their personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.. The waiting period to deduct bad debts is also cut from six to three months for small companies.
7. The requirements to keep regional incentives are relaxed: losses from 2020 and 2021 are not counted, project deadlines can be changed, and employment and investment conditions are respected if activity is temporarily stopped because of the pandemic.
8. Other measures: areas of high tourist footfall will be declared in 2021 using 2017 to 2019 data; there is a 50% Social Security rebate for permanent seasonal workers in tourism and retail from April to October 2021; performing artists and bullfighting professionals are exempt from minimum activity requirements in 2021; and COVID-19 vaccines and diagnostic tests have a 0% VAT rate until December 31, 2022.

Who it affects

• Self-employed people and small companies leasing premises: They can request a rent cut or deferral and defer tax debts.
• Workers and companies in tourism, hospitality and retail: Social Security exemptions linked to furlough schemes and rebates for permanent seasonal workers are extended.
• Landlords of business premises: They can deduct voluntary rent cuts granted for early 2021 from their income tax.
• Performing artists and bullfighting professionals: They are exempt from minimum activity requirements to stay in Social Security in 2021.
• Recipients of the minimum vital income benefit: Regional governments can forward their application to the National Social Security Institute with a certificate.

Words worth knowing

ERTE

Temporary layoff scheme (Expediente de Regulación Temporal de Empleo): a company temporarily suspends or reduces activity and its workers' contracts.

Estimación objetiva (módulos)

A way for some self-employed people to calculate income tax using fixed indexes instead of their actual income and expenses.

Gran tenedor

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

Concurso de acreedores

A court procedure for a company or person that cannot pay its debts, similar to bankruptcy.

Incentivos regionales

State financial aid for investments in certain areas, meant to correct imbalances between territories.

income tax

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

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