Corona-Pandemic: Immediate Taxation, Legal Measures and Financial Aid in Spain, France, Malta, Romania.
More new measures and financial aid packages have been announced to support SMEs during the pandemic. France, Malta and Romania have announced tax deferral policies and postponements of tax due dates. Spain has announced an extension to the state of emergency but is still maintaining the deadlines for tax payments. Our experts summarise the most important points.
The situation in Spain continues to be very serious. It is currently the country with the fourth highest number of virus cases worldwide. The government has asked parliament to extend the state of emergency for a further 15 days so that shops will remain closed, no leisure activities are allowed outside of the house and travel is only permitted to and from jobs and to acquire essential goods.
In order to help companies that had to shut down operations overnight, the government has eased the regulations on the temporary suspension of work contracts or the reduction of working hours to allow more flexibility. Added to this flexibility was a regulation allowing companies to not pay social security contributions for these employees if they agreed to the compromise of not terminating any employee during a six-month period, as well as providing facilities for employees to access unemployment subsidies.
The government also issued a decree on 24 March 2020 regulating the guarantees that will be granted to companies in need of financing to cover their liquidity problems due to the coronavirus. According to this regulation, the Official Credit Institute (ICO) will guarantee 80% of the loans requested by individual entrepreneurs and small and medium sized companies, and 60-70% of the loans requested by major companies.
In terms of taxation, the government is, at least up to now, maintaining the deadlines for the payment of taxes. Officially there are also no postponements of state tax payments although some regions, such as Madrid, have already announced such measures.
The government has suspended all other procedures, but taxes must still be paid by the legally mandated dates, although requests for deferrals will be accepted up to EUR 30,000 without a guarantee for companies with a turnover of less than EUR 6,010,121.04. However, there is intense pressure to try to convince the government to postpone these deadlines as other countries in the EU have done.
The three Ecovis Madrid companies are at your disposal for any questions about these regulations or the situation in Spain.
In the face of the COVID-19/Coronavirus epidemic, the government has introduced immediate support measures for businesses:
Delays to social and/or fiscal payment deadlines (URSSAF – Organizations for the Collection of Social Security and Family Benefit Contributions –, direct taxes).
- In the most difficult situations, direct tax rebates based on the individual scrutiny of the application.
- Deferral of payments for rents, water, gas and electricity for the smallest companies in difficulty.
- Aid of EUR 1,500 for the smallest businesses, the self-employed and micro businesses in the sectors most affected, thanks to the solidarity fund financed by the state and the regions.
- The mobilisation of EUR 300 billion from the state to guarantee bank credit lines that businesses may need as a result of the epidemic.
- Support from the state and the Banque de France (credit mediation) in negotiating the rescheduling of bank loans.
- Maintaining employment in companies with the simplified and reinforced short time working scheme.
- Support for the handling of disputes with customers or suppliers through the Business Ombudsman.
- The recognition by the state and local authorities of the coronavirus as a case of force majeure for their public procurement contracts. Consequently, penalties for delays will not be applied.
Ecovis France has prepared detailed information on tax deferrals, financial aid packages, documents and other supplements released by the government. Or you can find all the necessary information on our website. We are at your disposal whenever you have any questions or need our support.
The Maltese Government announced several financial measures aimed at assisting and supporting businesses hit by the COVID-19 slowdown. Through these financial measures, the Government is intervening to safeguard the country’s economy which guarantees the livelihood of the people of Malta and Gozo. The various measures announced include €900 million in bank guarantees, €400 to €700 million in tax deferrals, aid supporting teleworking initiatives, quarantine leave, wage supplement for specific businesses that have suffered due to the COVID-19 pandemic, and other social measures to safeguard employees that had their employment terminated or had to stay at home to take care of school-aged children.
The assistance is directed to support in following major categories: Teleworking Initiatives, Quarantine Leaves, COVID Wage Supplement, Self-Employed Assistance, Social Measures, Other Economic Measures, Guarantees and Soft Loans, Regulatory and other filings.
Regarding tax deferrals, the measures include the postponements of VAT, FS5s (covering Final Settlement System, Social Security Contribution and Maternity Fund), provisional tax and social security payments for the self-employed due by the end of March and April 2020. No interest or penalties will be charged on these postponed tax payments. VAT payments due by March and April 2020 are to be settled in two equal instalments with the two immediately following quarterly returns. FS5s, provisional tax and SSC payments due in March and April 2020 are to be settled in four equal monthly instalments in the four-month period between May and August 2020.
It is important to note that the deadlines for the submission of statutory tax documents will remain unchanged.
It is anticipated that further measures may be announced in due course. Ecovis Malta is ready to provide any immediate assistance requested during this difficult time as well as to support clients in obtaining the supplements and financial aid package.
On 18 March 2020, the government released Emergency Order 29/2020 covering economic, tax and budget measures, which was published in the Romanian Official Gazette no. 230/21.03.2020. It covers:
- Support programme for SMEs.
- The payment terms for taxes on buildings, land tax, transportation vehicles and land charges are prorogued to 30 June 2020. The payment term for local taxes and charges with the 10% bonus for the integral payment is extended to the same date.
- Taxes due for payment starting with the date of effect of this emergency order and unpaid 30 days after the end of the state of emergency are not subject to overdue penalties and interests.
- Payment of profit tax can be treated as a waiver of the stipulations.
- During the state of emergency, SMEs who have totally or partially ceased their activities on the basis of decisions issued by the authorities may benefit from the postponement of payments of some services and utilities.
- The penalties stipulated for delays in execution derived from contracts concluded by SMEs with public authorities are not owed during the state of emergency.
- The benefit of delayed payment for utility services is also applicable to family physician and dental care practices.
- The term for the registration of the declaration concerning the real beneficiary (ultimate controller) is extended until 3 months after the date of the termination of the state of emergency. During the state of emergency, the registration of this declaration is suspended.
The changes to social protection in the emergency order are also issued for the duration of the coronavirus pandemic period. Ecovis Romania is continuously preparing detailed documents to assist clients in understanding and complying with the measures. The documents are sent out upon request by our Romanian office.