Spain notifies Urgent Tax Measures to survive COVID-19 Crisis

Urgent Tax Measures - Spain - Taxscan

Last week, Spain notified, new fiscal measures to support the economy and employment affected by the pandemic. The measures were approved by the Royal Decree-Law 15/2020.

The additional measures adopted to date include the following:

  1. Value-Added Tax (VAT) Measures: Imports and intra-Community acquisition of certain health products and supply of goods listed in the Annex to the Royal Decree-Law will be subject to a zero percent rate. This will be applicable from 23rd April until 31st July 2020.

To avail the special rate, the beneficiaries must be public law entities, clinics or hospital centers, or private entities of a social nature.

The transactions will be recorded as exempt operations, but will not be affecting the deductibility of VAT incurred by the supplier.

The digital goods, namely, books, newspapers and magazines will be subject to a reduced rate of 4% which was 21% earlier. To apply this reduced rate, it is mandatory that the books, newspapers and magazines do not contain only or mainly advertising.

  1. Corporate Tax Measures: Corporates with an annual turnover of 600,000 Euros or less can opt to make installment payments, following the provisions of Article 40.3 of the Corporate Income Tax Act.

The benefits of this regime will not be applicable to those entities that apply the tax consolidation regime.

  1. Personal Income Tax Measures: The taxpayers carrying out economic activities and ascertain their net return using the objective estimation method can benefit from any of the following measures:
  • They may waive the existing method being used and can switch to direct estimation, with effect for the current year 2020. It should also be noted that this waiver will not extend for a minimum period of three years as it did before.
  • In a situation where the objective estimation is not waived, the calculation of installment payment will not consider the calendar days on which the state of alarm would have been declared in each quarter.