Tax rebates on the IBI and IAE in Madrid is published. The Official Journal of the Madrid City Council (BOAM) of 29th of May published the Agreements of the Plenary Session of the Madrid City Council, held on the same day, approving the modification of the
- Tax Ordinance regulating Property Tax.
- Tax Ordinance regulating the Tax on Economic Activities.
These allowances were already announced as support measures for the coronavirus crisis in Madrid.
Tax rebates on the IBI and IAE in Madrid.
Through this modification, which comes into force on the 1st of June 2020, the City Council approves a 25% rebate on each of the above-mentioned taxes. This will apply exclusively to the 2020 tax period.
The main aspects of this are indicated below.
Rebate on Property Tax (IBI)
With exclusive effects for the year 2020. The real estate destined to the uses of Leisure and Hospitality, Commercial, Shows and Cultural, will be able to enjoy a bonus of 25% of the total quota of the tax. Provided that they are declared of special interest or municipal utility.
For these purposes, it will be considered that there is special interest or municipal utility, when the following requirements are met:
- That the activity has been carried out in the property before March 15th, 2020.
- That the activity continues to be carried out until the 31st of December 2020.
- Finally, that the cadastral use of the property corresponds to Leisure and Hospitality, Commercial, Entertainment or Culture
In those cases where the tax payer does not coincide with the owner of the activity carried out in the property. To be entitled to the relief, the taxpayer must prove that
- a moratorium or deferment of payment of the income has been effected in favour of the owner of the activity
- a reduction in the same
- or any other measure of a similar nature has been taken to help ensure that the activity is maintained.
The subsidy is of a requested nature, so the declaration of special interest or municipal utility must be requested, using a standard form, expressly until the 30th of June 2020.
Rebate on Business Activity Tax (IAE)
With exclusive effect for the 2020 tax period. Taxpayers who pay municipal taxes and carry out any of the activities listed below may enjoy a 25% reduction in the corresponding tax liability. Provided that the activity is declared of special interest or municipal utility.
They will be beneficiaries:
- Activities that can benefit from the discount (included in the APPENDIX at the end of this document)
- That the activity should be carried out before 15th of March 2020.
- That the activity continues to be carried out until 31st of December 2020.
The relief will be 50% provided that the taxpayer has less than 10 dependent employees on the 1st of March 2020.
For the 2021 financial year, the tax payer will be entitled to a 25% rebate. In those cases where the average number of employees on the staff, with temporary or permanent contracts, at 31/12/2020, has not been reduced. With respect to the number of workers at the beginning of the tax period or at the start of the activity. When this took place after the 1st of January and before the 15th of March 2020.
The subsidy is of a requested nature, so the declaration of special interest or municipal utility must be requested, using a standard form, expressly until 30th of June 2020.