Spain: VAT obligations and the COVID-19 crisis (part 2)

In our previous entry we subjected our comments to any changes that may result from future legislative and administrative measures. They now have been produced with the publication Today in the Official Gazette of Royal Law-Decree 8/2020 of 17 March (the Royal Law-Decree) adopting extraordinary measures to answer the impact of the COVID-19.

This event obliges us to review - unluckily not much - our former comments about the VAT implications for non-resident companies operating in the Spanish territory. After the new published regulation, the situation for these companies as regards their Spanish VAT obligations stands as follows:

Deadline for the filing and payment of VAT returns: The main novelty is that there is not novelty at all. This must be the conclusion to be draw from the fact that:

• Nothing is specifically said in article 33 of the Royal Law-Decree about the extension of the existing deadlines for the filing of periodical VAT returns, informative returns or SII reports which, we understand, will remain unaffected.
• Besides, said article 33 of the Royal Law-Decree limit the scope of the general extension of voluntary payment deadlines until the 30^th of April (for existing liquidations)/the 20^th of May (new procedure) in the dead-lines to tax debts contemplated in number 2 and 5 of article 62 of the General Tax Law (taxes liquidated by the tax administration either in a voluntary or an executive procedure). This would exclude from the provision any self-assessed tax debts, as those resulting from the periodical VAT returns. 

Extension of deadlines for all tax procedures. The mentioned article 33 of the Royal Law-Decree regulates the general extension until the 30^th of April (for existing procedures)/the 20^th of May (for new procedures) in the dead-lines of any action required from the tax payer in all procedures before the tax administrations and so supersedes (if the motivation and ninth additional provision of the Royal Law-Decree is attended) the suspension regime contemplated in the third additional provision of Royal Decree 463/2020 of 14 March. As commented in our last entry, the same contemplates an interruption for the full duration of the estate of alarm in the calculation of deadlines of any on-going procedures before all administrations and public sector.

Postponement of payment. No additional changes have been introduced in the general regime for the postponement of tax debts which, apart from the special postponement regime for small companies as regards tax debts under 30,000 Euros regulated in article 14 of Royal Law-Decree 7/2020 that we commented in our last entry, remains the same and, as a result requires:

• Proof of the lack of cash-flow.
• Provision of proper guarantee (insurance, bank guarantee or an alternative one if accepted by the tax authorities) unless the company proves its lack of assets and the risk that the level of activity is jeopardized by the settlement of the debt.

In any case, we understand that the exceptional nature of the situation along with the complexity of determining the applicable deadline resulting from the Royal Law-Decree (i.e. a tax debt voluntarily self-assessed by the company would not benefit from the extended deadline meanwhile if unpaid and liquidated by the tax authorities it would) make us advance that this field will give rise to much confrontation before Courts should the authorities decide to apply the postponement regime with a restricted view. Given its importance we will come back to this issue in future comments.

Also, it is not to be dismissed that new legislative or administrative regulation are issued that may affect the existing described status quo. Again, we will review again our comments if necessary.