The Covid line of direct aids to Self-Employed and Companies was approved by RDL 5/2021 of March 12. These aids refer to extraordinary measures to support business solvency in response to the COVID-19 pandemic.
Below we explain the main characteristics of these direct aids.
Covid line of direct aids to Self-Employed and Companies
Direct aids to be managed by Regional Goverments
The beneficiaries will be the Self-Employed and non-financial companies that, to a greater extent, have been affected in their activity. Provided that they have their tax domicile in Spanish territory. Or in the case of non-resident non-financial entities operating in Spain through a permanent establishment.
The addressees will be the businessmen or professionals and entities assigned to the sectors of activity, defined in the following Annex.
They are related to:
- activities of the manufacturing industry related to the commerce and hotel and catering trade
- wholesale and retail trade
- sectors auxiliary to transport
- aeronautical maintenance
- and activities related to culture and sports.
Requirements for direct aids to Self-Employed and Companies
Its annual volume of operations (income) has fallen by more than 30% in 2020, with respect to 2019. Declared or verified by the Administration, in VAT or equivalent indirect taxation,
The Tax Agency is organizing a platform that will certify to the Autonomies that this drop in revenue really exists.
In no case will entrepreneurs or professionals, entities and consolidated groups that meet the requirements of being up to date with payments, but have declared a negative net result in 2019, be considered as recipients.
Its purpose will be to satisfy debt and make payments to suppliers and other creditors, financial and non-financial, as well as fixed costs. Provided that these have accrued between March 1, 2020 and May 31, 2021. And they come from contracts prior to the entry into force of the Royal Decree.
The destination of the amount of the aid is established with an order:
- firstly, payments to suppliers, in order of seniority, and if applicable, the amount of the aid will be reduced.
- and, if applicable, the nominal amount of the bank debt will be reduced. Priority will be given to the reduction of the nominal amount of the debt with public guarantee.
Amounts of aids to Self-Employed and Companies
The amounts of the aids are as follows:
- €3,000 in the case of entrepreneurs or professionals applying objective estimation (Modules).
- 40% of the drop in the volume of income of the year 2020 with respect to the year 2019. Exceeded 30% of the initial drop, for businessmen in direct estimation, or entities that have a maximum of 10 employees.
- 20% of the drop in the volume of income for the year 2020 with respect to the year 2019. Exceeding 30% of the initial drop, for business or professional entities and permanent establishments with more than 10 employees.
- The aid in the two previous cases may not be less than €4,000 or more than €200,000.
No direct aid may be granted after December 31, 2021. And the companies will benefit as long as they justify to the granting body, which is the Autonomous Community, the maintenance of the activity at 30/06/2022.
The regulation foresees that, within one month and ten days, the Government will formalize the order of distribution of the fund to the Autonomous Communities, after the signature of the corresponding agreements. From then on, it will be the Autonomous Regions who will channel the management of access to this aid.
Tax deferral for the first quarter of 2021
The deferral will be granted for tax debts whose deadline for filing and payment is between April 1 and April 30, 2021. Also including the following:
- Tax obligations to be fulfilled by the withholder or the person obliged to make payments on account.
- The obligations derived from taxes that must be legally passed on.
- Those corresponding to tax obligations to be fulfilled by the obligor on installment payments of Corporate Income Tax.
The deferrals will be granted for periods of 6 months. And they will not accrue interests of delay during the first four months of the postponement.
Only those entrepreneurs with a turnover in 2020 of less than €6,010,121.04 are eligible for these deferrals. That is to say, they are not considered to be large companies. And with a limit of €30,000, above that amount it is mandatory to present a guarantee.
Financial funds
A fund has been endowed so that ICO can accompany the processes of flexibilization and restructuring of its loan lines. Extending the payment terms, or in a second instance, converting the loans with public guarantee into participative loans. Only as a measure of last resort, write-offs will be allowed.
The existence of a fund with an endowment of 1 billion managed by Cofides will serve to recapitalize medium-sized companies.
Extraordinary measures in the insolvency area
On the one hand, the debtor who is in a state of insolvency will not be obliged to file for bankruptcy. This applies until December 31, 2021, inclusive,
On the other hand, these are measures aimed at facilitating and encouraging companies, professionals and self-employed persons to file a modification when they find themselves in difficulties to comply with:
- an agreement
- an out-of-court payment agreement
- or an approved refinancing agreement,
In such a way that the duty to request the opening of the liquidation phase is postponed when, during the term of the agreement, the debtor becomes aware of the impossibility of complying with the committed payments. Provided that the debtor submits a proposal for modification of the agreement. And this proposal is admitted for processing within a certain period of time.
The modification of the agreement, of the out-of-court payment agreement or of the approved refinancing agreement is facilitated. Until December 31, 2021, the debtor is allowed to present a modification of the agreement in force or to present a new one. Without the need for one year to elapse from the homologation of the agreement.
In the event of non-compliance with a refinancing agreement, a composition agreement or an out-of-court payment agreement. It is foreseen that creditors will not be able to request a declaration of default in court until September 30, 2021. The purpose of all this is to encourage renegotiation.
Holding of meetings of partners/shareholders telematically.
The Royal Decree contemplates the possibility of holding exclusively telematic meetings during 2021.
The administrative body will be able to agree in the notice of call to hold the meeting exclusively by telematic means. And that it will be considered to be held at the registered office regardless of where the Chairman of the Meeting is located. Provided that:
- there are reasonable guarantees to ensure the identity of the person exercising his right to vote.
- the possibility of participating in the meeting by each and every one of these means is offered:
- with telematic attendance
- representation granted to the Chairman of the Shareholders’ Meeting by remote communication means
- and advance voting through remote means of communication.
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