Due to the recent enforcement of i) Royal Decree-Law 7/2020, of 12 March, adopting urgent measures to address the economic impact of COVID-19, ii) Royal Decree 463/2020, of 14 March, declaring the alarm state for the management of the health crisis caused by COVID-19 and iii) Royal Decree-Law 8/2020, of 17 March, regarding urgent extraordinary measures to deal with the economic and social impact of COVID-19, the following tax implications have been summarised in chronological order below:
I. Measures introduced by Royal Decree-Law 8/2020, of 17 March:
- Suspension of the deadlines for paying the tax debt resulting from settlements released by the Tax Administration: deadlines for paying tax debts –either during the voluntary or enforcing period- as well as for deferrals and/or payment in instalment schemes granted, which would have not been concluded before 18 March but would conclude along the alarm state period (i.e. until 30 March, in principle), will be extended until 30 April 2020.
Nevertheless, if the communication notifying the deadline for paying the tax debts is received during the effectiveness of Royal Decree-Law 8/2020, i.e. while the state of alarm is in force, both deadlines will be extended until 20 May, unless the ordinary deadline stipulated in Article 62 Sections 2 and 5 of General Tax Law 58/2003, of 17 December ends after 20 May, in which case the deadline of the General Tax Law would apply.
- Suspension of the deadlines for replying to requirements, submitting tax appeals, etc.: deadlines for replying to requests, filing of tax appeals, etc., released within procedures stated for the application of taxes, penalties or refund of taxes unduly paid, rectification of material errors and revocation proceedings which would have not been concluded before 18 March, will be extended until 30 April 2020.
Nevertheless, if the communication notifying the mentioned deadline is received during the effectiveness of Royal Decree-Law 8/2020, i.e. while the state of alarm remains in force, the deadline will be extended until 20 May, unless the ordinary deadline stipulated in Article 62 Sections 2 and 5 of General Tax Law 58/2003, of 17 December ends after 20 May, in which case the deadline of the General Tax Law would apply.
However, if the taxpayer complies with the mentioned tax procedures while the alarm state is in place, the procedure shall be deemed completed.
The above shall apply except for the special rules foreseen in the customs regulations concerning deadlines for the submission of allegations and reply to specific requests.
- Suspension of the enforcement of guarantees relating to real estate assets: in the course of enforcement procedures, guarantees concerning real estate assets will not be enforceable while Royal Decree-Law 8/2020 is in effect and until 30 April.
- Extension of the terms stated for penalty and review procedures launched by Tax Authorities: dates elapsed within the period lasting from the entrance into force of Royal Decree-Law 8/2020 until 30 April 2020, shall not be regarded for the purposes of the maximum duration of these procedures, regardless of the Administration's right to promote, order and carry out the procedures it considers essential.
- Suspension of the statute of limitation and expiration periods: the time elapsed between the entrance into force of Royal Decree-Law 8/2020 and 30 April 2020 shall not count for the purpose of the statute of limitation and expiration periods stipulated in the General Tax Law, respectively.
- Suspension of the terms stated for filing economic-administrative claims: the terms for filing economic-administrative appeals or claims against tax statements, as well as for appealing against the resolutions issued within economic-administrative proceedings, shall not commence their computation until the end of the period elapsed between the entry into force of Royal Decree-Law 8/2020 and 30 April 2020 or until the notification made under the terms of the General Tax Administration, if this latter takes place after the former.
- Deadlines for attending information requests and others sent by the Cadastral/Real Estate Office General Directorate: deadlines for attending such requests which would have not concluded before 18 March will be extended until 30 April 2020.
In the event that the communication notifying the deadline for any of the aforementioned procedures is received during the enforcement of Royal Decree-Law 8/2020, i.e. while the state of alert is in place, the deadline for paying tax debts, both along the voluntary and executive periods, would be deemed extended until 20 May 2020, unless the deadline established in the general rule is longer, in which case the deadline established in this latter would preferable apply.
The period elapsed from the entry into force of the Royal Decree-Law until 30 April 2020 will not be regarded for the purpose of the maximum duration period of the proceedings initiated ex officio, although during this period the Administration may promote, order and carry out the essential procedures.
II. Measures adopted by Royal Decree 463/2020, of 14 March:
- Interruption and suspension of the deadlines stated for procedures followed before public bodies: such interruption of the deadlines would only be meant for the tax procedures (i.e. tax audits, response to individualised information requests), that is, it does not refer to filing obligations of tax self-assessments whose deadline would expire while the alarm state is in place (i.e. Forms 111, 115 and 303 corresponding to February 2020), unless otherwise stated.
The consequences of this deadline interruption are as follows:
- Tax proceedings initiated will be suspended until the alarm state is over, either because Royal Decree 463/2020 is no longer in force or because the extension of the alarm state is no longer in force.
- When the alarm state comes to its end, the deadlines for these tax procedures will be resumed at the situation they were when the alarm state came into force.
This suspension and interruption of the deadline, for tax purposes, has been extended in Royal Decree-Law 8/2020 of 17 March, previously analysed.
III. Royal Decree-Law 7/2020, of 12 March:
- Deferral of the payment of tax debts arising from tax returns or self-assessments: A payment postponement of the tax debts to be settled with regard to tax returns/self-assessments whose deadline ranges from 13 March to 30 May 2020 (both inclusive) may be granted by the Tax Authorities, upon request, to those individuals or companies who have obtained a turnover equal to or less than € 6,010,121.04 in FY 2019.
This deferral, granted on an extraordinary basis, where applicable, may be requested with regard to all types of tax debts, including those derived from items such as withholding, VAT or CIT payments, which are not generally allowed for deferral purposes.
The enjoyment of this tax debt deferral (up to a threshold of €30,000, with no guarantee or collateral requirement) will be carried out under the following conditions:
- Payment of the debt shall be deferred for six months, and
- No interest on arrears shall accrue meanwhile.
This information note will be updated as new information becomes available.
Last reviewed: 23 March 2020