Covid-19 is disrupting business across the world and requiring tax authorities to implement rules and reliefs to support businesses through this period. At RSM, we are pulling our global indirect tax resources together to create a single source of information, support and thought leadership.
The Spanish government has implemented tax measures which will have an impact on VAT, meaning businesses must assume that the actions taken will be based on VAT deferment measures related to the submission of VAT returns, before the Spanish Tax Authorities and performance of payments, in favour of the Public Treasury.
Furthermore, businesses will also have an extension on deadlines for the submission of any documents related to limited VAT audits or relevant from a tax perspective.
What type of business is this information relevant for?
All actions and measures implemented in Spain are focused on Spanish businesses which do not exceed 6 million euros in turnover from 2019. Hence, we understand that the implemented measures will be useful for some of the international VAT clients operating in the middle market and performing transactions in Spain. All sectors are impacted by the measures the Spanish government has implemented.
VAT/GST reliefs – tax authority announcements
Following the publication of the Real Decreto-ley 7/2020, approved on the 12 March, 2020, measures have been introduced to counteract the negative economic impact of the COVID-19 pandemic that include changes in tax laws leading to a deferral of taxes collectible by the Spanish state.
Please find below the detailed changes that were approved:
- A deferral of tax debts is available for tax liabilities arising and payable between the 13 March, 2020 and 30 May, 2020.
- The debt shall meet the requirements stated in article 82.2.a) of the general tax system law, which establishes the possibility to defer tax payments without presenting a guarantee if a tax regulation establishes. Currently, the maximum amount of tax debt that may be deferred is 30,000 euros.
- In this case, a deferral may be claimed for tax payments that are not commonly included in the regulation, such as VAT.
- Only taxpayers that have not exceeded a volume of operations of 6 million euros in the fiscal year 2019 shall be entitled to apply for the deferral of tax payments.
- Deferral is granted for a period of six months.
- No late payment interests will be accrued during the first three months of deferral.
Furthermore, a new Royal Decree was enacted on 14 April, 2020 providing additional measures:
- Deadlines for submission and payment of the VAT returns corresponding to 1Q 2020 are extended until 20 May, 2020 for businesses which annual turnover in 2019 did not exceed 600K euro.
- Such measures do not apply to VAT groups.
- Such measures would neither be applicable to the submission of declarations governed by Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the European Union Customs Code and/or its implementing regulations.
What ideas have you generated to support businesses?
RSM Spain has created a COVID-19 committee, made up of partners from key areas of the business, in order to address any clients concerns. To this end, we have enabled two urgent communication channels in RSM Spain through which our partners and collaborators can advise and assist in legal, labour, tax and financial matters.
Call to action
As far as we understand, business leaders should take actions depending on the economic sector they are operating within, as some of the business activities have been limited or closed until further notice, and others remain active.
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