The Flexible Cessation of Activity for the Self-Employed, also called CATA, is established. That is, to request a flexible ordinary CATA compatible with the self-employed activity. Regulated in RDL 24/2020 of 26th June.
Bearing in mind that the Extraordinary Benefit for Cessation of Activity for Self-Employed Workers (PECATA) ends on 30th of June.
And that, in addition, in order to apply for the CATA, a series of invoicing requirements must be met, as regulated in art.9 of said RDL 24/2020.
Flexible Cessation of Activity for the Self-Employed
On 30th of June the extraordinary benefit for cessation of activity ends.
The aid included in the BOE of 27 June is not an extension of the extraordinary benefit for cessation of activity. Instead, for those self-employed workers who have been receiving the PECATA, they can apply for an ordinary “flexible” TASTING.
For those self-employed workers who were receiving the extraordinary severance pay on 30 June, there are now two possible situations:
- do not apply
- and/or do not comply
..the requirements to apply for the normal/ordinary TASTING. They will have a progressively decreasing fee exemption during the months of July to September.
In addition, an extraordinary cessation of activity is established and regulated for seasonal self-employed workers. Those dedicated to leisure activities, tourism, hospitality. The duration of the benefit will be a maximum of 4 months.
Effects of the regulation
For all those freelancers who, on 30 June, receive the PECATA extraordinary benefit, there are two possibilities as of 1 July:
For those who recover their activity, exemption from social security contributions
- July… 100%
- August… 50%
- September… 25%
In this case the freelancer will not have to carry out any procedure or communication.
For those self-employed workers who continue to reduce their activity in the third quarter.
With a reduction in turnover of at least 75% in relation to the same period in 2019. And, in addition, those who have not obtained a net income of more than 5,818.75 euros during the third quarter of 2020 will be able to apply for the benefit again.
Access requirements New benefit Cessation of activity.
- Be affiliated to and registered with the Special Scheme for Self-Employed Workers. Therefore, all self-employed workers who have been removed from the system during the alarm state will not be entitled to this benefit. Regardless of whether they have been collecting PECATA.
- Have covered the minimum period of contribution for cessation of activity referred to in Article 338. That is, 12 months and continuously.
- Not have reached the ordinary age of entitlement to the contributory retirement pension. Unless the self-employed worker has not completed the required contribution period.
- Be up to date with the payment of social security contributions. However, if on the date of cessation of activity this requirement is not met, the managing body will invite the self-employed worker to pay the contributions due within a non-renewable period of 30 calendar days. The regularization of the overdraft will produce full effects for the acquisition of the right to protection.
- Important, postponements are not valid.
- It will be required to show proof of a reduction in invoicing during the third quarter of 2020 of at least 75% in relation to the same period in 2019.
- Not having obtained a net income of more than 5,818.75 euros during the third quarter. Or what is the same 1,939.58 euros per month.
To accredit by means of a responsible declaration the fulfillment of all their labor and Social Security obligations that they have assumed.
How, when, what…
How will the application be made?
The self-employed person will access the PECATA form and an option will appear where he/she can make this new application. Your data will be preloaded and you will only have to attach the responsible statements with the new requirements.
When can the application be made?
If you make the request between 1 and 14 July, your right to the benefit will be recognised from 1 July.
If you apply on 15 July or later, your entitlement will be recognised on the day following the date on which you apply.
What documentation will be required to verify the reduction in invoicing?
This check will be carried out after October. When the request is made, responsible statements will be signed, which means that you will not have to provide documentation on invoicing and income.
Later, it will be required:
- The Mutual Insurance Company will obtain from the Ministry of Finance the tax data for 2019 and 2020.
- In addition, the Mutual Insurance Company may request the self-employed person:
- A copy of form 303 for the self-assessment of the Value Added Tax (VAT), corresponding to the declarations of the second and third quarter of the years 2019 and 2020.
- Copy of form 130 corresponding to the self-settlement in payment in instalments of the Personal Income Tax (IRPF) for the second and third quarters of the years 2019 and 2020. For the purposes of determining what corresponds to the third and fourth quarters of those years.
- Self-employed workers who pay personal income tax by objective estimation (form 131) must provide the necessary documentation or any other means of proof that serves to accredit the income required under this provision.
Can the self-employed person waive this benefit at any time?
Yes, he can waive this benefit at any time.