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Direct Financial Assistance for Self-employed and Companies

in News

The Royal Decree-Law 5/2021, of March 12, has been approved, considering a set of financial assistance, among which the provision of up to € 7,000 million for companies and self-employed who have their tax domicile in Spanish territory, in case they have been affected by the consequences of COVID-19, to support solvency and reduce their indebtedness.

The most noteworthy points of this financial assistance are the following:

Requirements:

    • Entrepreneurs, professionals and entities attached to sectors with CNAE indicated in Annex 1 of RD 5/2021. Also, entrepreneurs or professionals who apply the objective estimation regime in personal income tax (IRPF) assigned to the sectors defined in Annex 1.
    • That the volume of operations in VAT 2020 has fallen more than 30% compared to 2019. This information will be provided by the Tax Administration at the request of the Autonomous Communities.

The maximum amount provided:

    • Regarding businessmen or professionals who apply the objective estimation regime in personal income tax, € 3,000.
    • Regarding businessmen and professionals with a volume of VAT transactions that has decreased by more than 30% in 2020 compared to 2019:

> 40% of the drop in billing exceeds that 30% decrease, for businessmen or professionals who apply the direct estimation regime in personal income tax or entities that have a maximum of 10 workers. It will in no case be less than € 4,000 or more than € 200,000.

> 20% of the drop in billing exceeds that 30% decrease for entities or businessmen and professionals who have more than 10 workers. It will in no case be less than € 4,000 or more than € 200,000.

Conditions (highlighted):

    • Maintain the activity corresponding to the aid until June 30, 2022.
    • Do not distribute dividends during 2021 and 2022.
    • No increases in remuneration to senior management during the period of two years from the application of any of the measures.

Term: No direct aid may be granted later than December 31, 2021.

Finalist nature: direct aid must be used to satisfy the debt and pay suppliers and other creditors, financial and non-financial, as well as fixed expenses incurred.

These direct grants will be called by the Autonomous Communities, which must define the award criteria.

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