Spain. COVID-19 crisis. Instructions to apply for the special postponement procedude

Royal Law-Decree 7/2020 of 12 March, (published at Official Gazette of the 13^th March) adopting economic measures to answer the impact of the COVID-19 in the economy  contemplated some specialities as regards the postponement regime of those tax debts which dead-lines for filing and payment occur between the 13rd of March and the 30^th of May.

The specialities for those companies entitled to benefit from this special postponement regime are the following:

• The postponement is not dependent of the lack of cash-flow of the company.

• Postponement of withholding taxes, VAT quotas and payments on account of the Corporate tax is possible (under normal conditions this could not be possible unless unless unpaid). 

• It is automatically granted for a period of 6 months, interest free for the first 3 months (a late payment interest rate of 3.750% would be applied to the rest).

The postponement is optional for those companies and tax debts meeting certain conditions, namely:

• The applicant must be a small company (turnover under 6 million Euros). For the purposes of calculation only the transactions for which the company is a Spanish VAT taxable subject must be considered. In our opinion, unless related to a VAT permanent establishment in Spain sales eligible for the reverse charge rule should not be considered for the determination of said threshold. 

• The tax debt cannot exceed from 30,000 Euros.

For those companies or debts outside the scope of this special regime the postponement could still be possible following the general regime.

Applications should be electronically filed at the website of the Spanish Tax Agency (AEAT) which has published specific instructions in this issue that you can access clicking here.