Brief review to the tax measures in Spain as a result of the Covid-19 crisis

From the onset of the COVID-19 sanitary crisis, various tax measures have been enacted to attempt to alleviate the effects of this crisis. The present articles includes a summary of the main measures adopted as from 12 March until 23 April 2020.

1. Tax proceedings and taxes resulting from a specific assessment or in respect of which the taxpayer had already been granted a specific authorization to postpone or pay in installments

With the onset of the crisis, the government approved an extension to various tax deadlines, depending on the beginning or initial communication of the corresponding time-limit. As from 23 April 2020 and with the extension of specific state of emergency, these time-limits can be summarized as follows:

An extension until 30 May is granted in respect of the payment deadlines of taxes resulting from specific assessments, whether these taxes be still under voluntary payment periods or under enforcement proceedings. The same extension will apply to installments, postponements, auctions and disposal of property proceedings. This extension is granted in respect of deadlines which were pending as of 18 March.

An extension until 30 May is granted in relation to the following procedural terms, provided these have not expired as of 18 March:

• Terms to reply to injunctions, orders of attachment and tax-related information requests;
• Terms to lodge pleadings with respect to hearings or initiation of certain specific proceedings related to taxes, penalties, annulments, refunds of undue taxes, etc.

An extension until 30 May is granted in respect of the payment deadlines of taxes resulting from specific assessments, whether these taxes be still under voluntary payment periods or under enforcement proceedings. The same extension will apply to installments, postponements, auctions and disposal of property proceedings. This extension is granted in respect of deadlines starting as from 18 March. (The extension will apply unless the deadline under general rules is longer, in which case the longer deadline will prevail).

An extension until 30 May is granted in relation to the following procedural terms provided these have been initiated as from 18 March:

• Terms to reply to injunctions, orders of attachment and tax-related information requests;
• Terms to lodge pleadings with respect to hearings or initiation of tax proceedings.

The extension will apply unless the deadline under general rules is longer, in which case the longer deadline will prevail

The term as from 14 March until 30 May will be disregarded for the purposes of calculating the statute of limitations, expiry periods and terms of maximum duration of tax proceedings.

Deadlines to file appeals or administrative review proceedings, in cases where these terms have not expired as of 13 March, will be calculated as from 30 May.

These deadline extensions will also apply to proceedings from Local and Regional entities.

Note that, although these tax measures were approved on 18 March, their application should extend as from 14 March, when the government declared the country to be under a specific state of emergency ("estado de alarma") as a result of the COVID-19 crisis.

2. Tax returns

The above provisions do not affect the deadlines for filing and payment of debts due from "usual" tax returns. Therefore, deadlines are maintained in relation the filing and payment of the main state taxes: Corporate Income Tax, VAT, Individual Income Tax, Wealth Tax and payments on account, etc.

As an exception, filing and payment of tax returns due between 15 April until 20 May, will be extended to this later date. This extension will only apply to taxpayers with an annual turnover in 2019 not above 600,000 Eur. excluding taxpayers part of a tax group either for Corporate Income Tax or for VAT purposes.

Additionally, a postponement will be granted for the payment of taxes on returns due between 12 March and 30 May, provided the aggregate amount of pending taxes (subject to certain requirements) does not exceed 30,000 Eur. and the taxpayer's annual turnover in 2019 is not above 6,010,121,04 Eur. The postponement will be for a six-month period with no late interest being due during the first three months.

3. Regional taxes

Moreover, the deadlines for the filing and payment of Inheritance and Gift Tax (Taxpayers resident in Spain) and Transfer Tax fall within the remit of Spain's Autonomous Regions. Taxpayers should review the specific measures adopted by each Region (most have enacted one to two-month extensions).

4. Customs duties and debts

Finally and as regards customs duties and debts (VAT), a postponement will be granted in relation to customs filings submitted between 2 April and 30 May, provided the following conditions are met:

• The amount of tax debt to be postponed must be above 100 Eur. but below 30.000 Eur.
• The recipient of the goods must be a taxpayer with an annual turnover in 2019 not above 6.010.121,04 Eur.

The postponement will be for a six-month period as from the expiry of the filing deadline and no late payment interest will be due in the first three months. This postponement will not apply to taxpayers which include their VAT debts in their periodic VAT returns.