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23-06-2021

Year-end measures against the effects of Covid-19

Today, Royal Decree-Law 35/2020 of 22 December was published in the Official State Gazette (BOE), which, among other measures, introduced new tax rules to mitigate the economic effects of Covid-19 and to facilitate taxpayers’ compliance with their tax obligations (click here to access the content of this regulation). See below the main tax innovations.

Deferral of self-assessments for the first quarter of 2021

Firstly, the deferrals of self-assessments to be filed between 1 April and 30 April 2021 by companies and self-employed workers with a turnover of less than 6,010,121.04 euros in 2020 have been made more flexible.

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 also apply to withholdings and payments on account, to payments in instalments of corporate income tax and to VAT. Note. The deferral may be requested for up to six months, without interest for late payment for the first three months.

Entrepreneurs in modules

On the other hand, the following tax improvements have been introduced for entrepreneurs under the objective assessment regime for personal income tax (IRPF) and the simplified VAT regime:

  • The reduction applicable to the net return of modules to be computed in the 2020 personal income tax return is increased from 5% to 20% (in the case of entrepreneurs who carry out activities linked to the tourism, hotel and catering and commerce sectors, the reduction is 35%). Note. 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.
  • It also approves a 20% reduction in the annual tax due on current transactions under the simplified VAT system for 2020 (35% for activities linked to the tourism, hotel and catering and commerce sectors). Note. 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.
  • For the purpose of calculating the annual income for 2020 under the objective assessment of personal income tax and the tax on current transactions under the special simplified VAT scheme, 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 had been suspended as a result of the measures against Covid-19 decreed by the authorities should not be counted as a period of activity. Note. Likewise, such days should not be taken into account when calculating the IRPF instalment payment for the fourth quarter of 2020.
  • 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 may return to paying tax under modules in 2021 or 2022, provided that they meet the requirements for its application and revoke the waiver.
  • Finally, the deadline for submitting waivers or revocations relating to the module regime for the year 2021 has been extended until 31 January 2021. Attention! The waivers and revocations submitted during this month of December until the publication in the BOE of Royal Decree-Law 35/2020 will be understood to have been submitted during the working period. However, employers who so wish may change their option again between 24 December 2020 and 31 January 2021.

Incentive for lessors of premises

Landlords who are not considered “large tenants”, with premises in which certain economic activities linked to the tourism, hotel and catering and commerce sectors are carried out and who voluntarily agree to reductions in the rent corresponding to the months of January, February and March 2021, will be able to include the amount of the reduction in rent agreed during those months as a deductible expense for the calculation of the return on real estate capital.

Attention! This does not apply if the reduction in rent is subsequently compensated by the lessee through increases in subsequent rents or other benefits, or if the lessees are a related person or entity.

Impairment of receivables due to non-payment in the case of SMEs and landlords

For the financial years 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 months 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”. Note. Likewise, individuals renting property can also make use of this rule when calculating the net return on real estate capital to be declared in their Personal Income Tax.

Royal Decree-Law 35/2020 of 22 December has introduced new fiscal measures to mitigate the economic effects of Covid-19.