New economic emergency measures COVID-19 

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New economic emergency measures COVID-19 

On March 18, 2020, Posted by , In Business Spain,Dochterbedrijf,Taxes Spain, With Comments Off on New economic emergency measures COVID-19 

On Tuesday 17/03/20, the Spanish Government announced the following emergency economic measures to help businesses and workers during this difficult period:

Temporary lay-offs and short-time working (ERTE)

Force majeure: companies that have to suspend employment contracts or reduce working hours during the state of emergency as a direct consequence of this declared state of emergency (e.g. compulsory shutdown of activities, closure of shops, no supply of raw materials, etc.) can apply to the authorities quickly and without much administrative hassle.

Productive, organizational and technical reasons: if employment contracts are temporarily suspended or working hours are reduced as an indirect consequence of the declared state of emergency (e.g. less demand for products or services), this must first be agreed with a workers’ delegation. This delegation must be put together within 5 days, after which the application must be presented to the authorities within 7 days.

In both situations, the authorities will give their decision within 5-7 days.

The workers in question will receive unemployment benefits during the ERTE and they will have to be re-employed after the crisis under the same conditions as before.

Social security contributions

Companies using an ERTE (see above) and with less than 50 employees on 29/02/20, are exempted from paying employer contributions for inactive employees or shortened working days during the period that this ERTE is in force. This redemption is 75% for companies with more than 50 employees.

The exemption from employer’s contributions to the Seguridad Social only applies in the case of an ERTE due to force majeure.

In order to make use of this exemption, the workforce must be maintained at least 6 months after resuming the work activities.

State-guaranteed financing

At least € 100 billion will be made available for the rapid and efficient provision of state-guaranteed financing for all companies in need of liquidity to cope with this difficult period.

A special financing line has been made available for tourism enterprises.

Previous measures

In addition to the measures mentioned above, another economic emergency package was already in force since last Friday 13/03/20 and these measures will also remain in force:

Deferral of taxes for SMEs

Payments of taxes for which declarations have to be submitted until 30 May 2020, can be postponed for 6 months under certain conditions. This applies to wage and professional taxes, VAT and (interim) corporate income tax.

For the time being, the measure only applies to SMEs. In order to take advantage of the postponement, it is a requirement that the turnover in 2019 does not exceed EUR 6 million (exactly: EUR 6,010,121.04).

For tax amounts up to EUR 30,000, deferrals may be requested without providing guarantees. For deferrals of amounts above 30,000 euros, guarantees must be given to the tax authorities.

No default interest will be charged during the first 3 months of the deferment.

Staff member with virus?

In addition, the government has decided that the quarantine of an employee as a result of infection with the COVID-19 virus is considered a labour accident.

The duration will be decided by the doctor. The employee can only return to work with the permission of a medical specialist.

In this case, the social insurance system acts as a safety net.

Hospitality and tourism sector

Companies that are directly or indirectly (e.g. hospitality industry) active in the tourism sector and that are normally active during the months February, March, April, May and June, can take advantage of a discount (of 50%) on social security contributions.

In order to take advantage of this, all workers must be active (for the Canary Islands and Balearic Islands another law applies).

 

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