Tax measures for the tourism, hotel and catering industry and trade.

The approval of Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality, and trade sectors and in tax matters introduces new tax regulations to mitigate the economic effects of Covid-19

Postponement of tax debts

The income of the tax debt corresponding to all returns-settlements and self-assessments whose term of presentation and income ends from April 1st to April 30th 2021, both inclusive, of up to 30,000 Euros and without guarantee may be deferred, including some of the tax debts that, in accordance with article 65.2 of the General Tax Law, could not be deferred or divided:

  • Withholdings and payments on account.
  • Fractional payments of Corporation Tax.
  • VAT declarations.

The person or entity that wants to postpone the tax debt must comply with the requirement of having a net turnover not exceeding 6,010,121.04 Euros in 2020.

The deferral will be up to 6 months, while no late payment interest will accrue during the first 3 months of the deferral.

Other tax measures approved

Reductions in personal income tax and VAT: it affects the net income calculated by the objective estimation method in personal income tax and the share accrued from current operations of the simplified VAT regime, so that:

  • The reduction goes from 5 to 20% on the net yield of modules for the declaration of personal income tax for 2020, and to 35% for activities related to the tourism, hospitality, and commerce sectors. In the same way as regards the annual fee accrued by current operations of the simplified VAT regime.
  • The number of tax periods affected by the waiver of the objective estimation method in personal income tax in 2020 and 2021 is also reduced.
  • The days on which the state of alarm was declared in the first semester of 2020 or the days of the second semester of 2020 in which the activity had been suspended as a result of the measures adopted to contain the epidemiological situation will not be counted as a period in which the activity was carried out.
  • The deadline for submitting resignations or revocations of the module regime is extended in 2021 until January 31, 2021.

Incentives to promote the reduction of rental income: lessors who are not large holders and reduce the rental rent in the months of January to March 2021 may deduct this reduction from the rent of real estate capital in the personal income tax return.

Deductibility of losses due to impairment of credits derived from possible insolvencies of debtors in small companies: provided that more than 3 months have passed since the credit expired (previously 6 months were required, to be deducted).

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