At the end of December 2020, the Government approved a series of new tax measures to mitigate the economic effects of COVID-19 and to support the tourism, hotel and catering and commerce sector.
On 22 December 2020, Royal Decree-Law 35/2020 was published in the Official State Gazette (BOE), which includes, among other measures, new tax rules to mitigate the economic effects of the current health situation and facilitate compliance with certain tax obligations. The main new tax measures are:
1.- Tax deferral for the first quarter of 2021
Companies and self-employed individuals with a turnover of less than 6,010,121.04 euros in 2020 will be able to request the granting of deferrals of self-assessments whose deadline for filing and payment is from 1 April to 30 April 2021.
In these cases, the Treasury will allow the possibility of deferring debts of up to 30,000 euros automatically and without guarantee (which already exists at present) to be applicable also to withholdings and payments on account, to payments in instalments of Corporation Tax and to VAT. The deferral may be requested for a period of up to six months, with no interest due for the first three months.
2.- Incentive for lessors of premises
Landlords who are not considered “large landlords” or public entities, with premises in which certain economic activities linked to the tourism, hotel and catering and commerce sectors are carried out, will be able to compute, for the calculation of the return on real estate capital, as a deductible expense the amount of the reduction in the rent of the lease that they have voluntarily agreed from 14 March 2020 corresponding to the monthly payments accrued in the months of January, February and March 2021.
The lessor must report the amount of the deductible expense separately in their tax return, also stating the tax identification number of the lessee whose rent has been reduced.
This deduction as a deductible expense will not be applicable when the reduction in rental income is subsequently compensated by the lessee by means of increases in subsequent income or other benefits, or when the lessees are a related person or entity.
3.- Impairment of receivables due to non-payment in the case of small companies and lessors
For tax periods beginning in 2020 and 2021, the period that must elapse from the due date of a receivable for the impairment to be deductible is reduced from six to three months.
This important new feature is applicable both to corporate income tax and personal income tax (in the event that an economic activity is carried out), in the case of companies and entrepreneurs that are considered to be “small companies”.
Likewise, individuals renting property may also benefit from this rule when calculating the net return on real estate capital to be declared in their personal income tax.
4.- New developments for entrepreneurs in modules
The following tax improvements have been introduced for entrepreneurs under the objective assessment regime for personal income tax and the simplified VAT regime:
- For the financial year 2020, the reduction applicable to the net return of modules to be computed in the personal income tax return is increased from 5% to 20% (in the case of entrepreneurs carrying out activities linked to the tourism, hotel and catering and commerce sector, the reduction is 35%). Furthermore, this reduction will also be taken into account when calculating the IRPF instalments for the fourth quarter of 2020 and the first quarter of 2021.
- Likewise, a reduction of 20% of the annual tax payable on current transactions under the simplified VAT system for 2020 (35% for activities linked to the tourism, hotel and catering and commerce sectors) has also been approved. This reduction will also be applied in the calculation of the payment on account corresponding to the first quarterly instalment of the financial year 2021.
- To mitigate the impact of the states of alarm declared in 2020, in order to determine the annual income for 2020 under the objective assessment of personal income tax and the tax for current transactions under the special simplified VAT system, both the days on which the state of alarm was declared in the first half of 2020 and the days in the second half of 2020 on which the effective exercise of the activity was suspended as a result of the measures against COVID-19 will not be counted as a period of activity. Likewise, such days should also not be taken into account when calculating the fourth quarter 2020 personal income tax instalment payment.
- The waiver of the application of the module system for the 2021 tax year will not prevent taxpayers from returning to the module system in 2022. Likewise, those taxpayers who waived this method in 2020 will be able to return to module taxation in 2021 or 2022, provided that they meet the requirements for its application and revoke the waiver.
- The period for waivers and their revocation that must take effect in 2021 will be from 24 December 2020 to 31 January 2021. Waivers already made during the month of December 2020 before the above deadline shall be deemed to have been made on time. However, entrepreneurs who so wish may change the option again between 24 December and 31 January 2021.
5.- Applicable VAT rate for certain goods and services to combat the effects of COVID-19
With effect from 24 December 2020 and valid until 31 December 2022, the 0% VAT rate and the equivalence surcharge will be applied to:
- Deliveries, imports and intra-Community acquisitions of COVID-19 in vitro diagnostic medical devices and COVID-19 vaccines authorised by the European Commission.
- The provision of transport, storage and distribution services related to deliveries, imports and intra-Community acquisitions of the aforementioned goods.
These types of transactions will be documented on invoices as exempt transactions.