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COVID-19 Quick guide for foreigners about Spain 2020 www.gesdocument.com
INDEX
0. Brief introduction
1. Individuals
1.1 Limitations on mobility and opening of establishments
1.2 Ownership by non-residents of real estate properties
1.3 Labor measures applied to employees
2. Entrepreneurs
2.1 Special provisions for cancellation of contracts
2.2 Limitations on foreign investments
3. Representation Offices
3.1 Tax payment postponements. Tax deductions on salaries
3.2 Suspension of administrative, civil and procedural deadlines
4. Spanish companies or subsidiaries owned by non-residents
4.1 Tax payment postponements: VAT, Corporate Income Taxes and other taxes
4.2 Deadlines and rendering of annual accounts for the 2019 financial year
4.3 Applicable labor measures during the COVID-19 situation
4.4 Aid for companies in relation to Social Security contributionsCOVID-19
Quick guide for foreigners about Spain
Brief Introduction
COVID-19
Due to the COVID-19 crisis, extraordinary
measures have been approved in the fiscal,
labor and commercial fields with the aim of
mitigating its negative effects on the economy
and on society.
How does this regulation affect foreigners
who have properties or a subsidiary in Spain,
who are investors or who have to pay taxes in
our country?
In this guide we focus on the different
situations that may occur depending on
the type of foreign profile, and explain their
regulatory impacts in a practical way.
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Quick guide for foreigners about Spain
1. Individuals
1.1 Limitations on mobility and opening of 1.2 Ownership by non-residents of real
establishments estate properties
On March 14, 2020, Royal Decree 463/2020 was a) Rented to Spanish residents
published, and entered into force, declaring the The government has established the suspension of
State of Emergency for the management of the evictions for vulnerable households without housing
health crisis caused by COVID-19. alternatives and the extraordinary extension of
leases for habitual residences.
During the validity of the State of Emergency, people
can only use public roads for basic activities such as: Likewise, new rent aids are incorporated and
microcredits are granted to tenants in vulnerable
1. Acquisition of food, pharmaceuticals and basic situations (the unemployed or those affected by
needs. temporary redundancy (ERTE) with family income
2. Attending health centers, and traveling to below 1,613.50 euros or a rent that exceeds 35% of
services and establishments. income).
3. Traveling to their place of work to carry out their Tax filings related to income obtained from rentals
job, profession or business and then back to remain as usual and no delays or postponements are
their homes. available.
b) Under mortgages to be paid in Spain
Likewise, the circulation of private vehicles is limited
to carrying out those activities or for refueling at gas In order to protect working people who, as a
stations. consequence of the situation in which we find
ourselves, have become unemployed or whose
Additionally the opening to the public of retail stores
income has been considerably reduced, a
and establishments has been suspended, with the
moratorium has been established on the payment
exception of commercial businesses to cover basic
of mortgages in order to avoid the loss of homes.
needs such as retail food, beverage, products and
essential goods, as well as pharmaceutical or similar Labor measures applied to employees
establishments.
Flexibility of working hours. Employees are entitled
Currently only Spanish nationals and legal residents to request the adaptation or reduction of the
can enter Spain. workday if they prove that they are undertaking
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Quick guide for foreigners about Spain
care duties as a result of the measures taken or the • Maximum amounts:
circumstances generated by the coronavirus.
• Beneficiary without children: 1098.09€
This reduction does not require any previous notice, • Beneficiary with 1 child: 1254.96€
beyond that derived from good faith, is not limited
to a minimum or maximum percentage even up to a • Beneficiary with 2 or more children: 1411.83€.
100% reduction, and does not include the possibility
of being sanctioned or dismissed. However, no Social Moreover, employees affected by an ERTE should
Security benefit has been established to compensate not apply for unemployment benefit, as the
for this reduction. company is obliged to carry out the procedure on
behalf of the workers, as is mentioned in the section
Employees affected by temporary redundancy on Streamlining of ERTEs.
(ERTE). In order to guarantee income during periods
of suspension of contracts and reduction of working Temporary employees. Royal Decree-Law 11/2020
hours, the requirements for access to unemployment establishes aid for temporary workers who do not
benefit have been relaxed. Consequently, all employees have a sufficient minimum contribution period and
affected by ERTE will have the right to receive whose contracts terminate during the COVID-19
contributory unemployment benefit, even if they lack situation. The aid will be 430 euros and will last
the minimum period of paid employment necessary for one month. The only requirement is the minimum
it. established duration of the contract whose end has
arrived, and which must be at least two months. This
Moreover, the period in which the unemployment aid will be incompatible with other unemployment
benefit is received will not count towards the
benefits or social services benefits.
established maximum periods of receipt, and they
will be automatically extended.
The unemployment benefit will consist of the
application of 70% of the regulatory base of the
benefit, which will be determined by the average of
the worker’s contribution bases during the 180 days
prior to the suspension of the contract. In any case,
there are limits that must be considered:
• Minimum amounts:
• Beneficiary without children: 501.98€
• Beneficiary with children: 671.40€
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Quick guide for foreigners about Spain
• The physical presence of the worker is not
necessary for confirmation of sick leave, as
long as there is an indication from the authority
in cases of isolation and confirmation of the
disease by available means in the Health Service
(clinical histories).
• When the period of isolation/contagion or
illness is known after its start, the leave will be
issued retroactively.
2. Entrepreneurs
2.1 Special provisions for cancellation of
contracts
Different measures are applicable to purchase and
Sick leave due to COVID-19. Sick leave reports sale contracts of goods and to provision of services,
can only be issued by doctors in the Public Health whose execution is impossible as a consequence
Services, both for situations of isolation and illness, of the application of the measures adopted in the
and to all workers who need it. declaration of the State of Emergency. In these
cases, consumers and users may exercise the right
The contingency to be completed will always be due
to terminate the contract within 14 days.
to Common Illness (although for real purposes they
are considered to be an accident at work). 2.2 Limitations on foreign investments
As long as medical leave has not been issued, actions In addition, the regulations on foreign investments
aimed at suspension of the employment relationship have been strengthened to prevent companies
and recognition of the right to the aforementioned outside the European Union from taking control
financial benefit by IT will not start. Therefore, the of Spanish companies by exploiting the ongoing
following must be taken into account: decline in their shares during the current situation.
• Prior to its issuance, medical leave for isolation As such, the liberalization scheme for foreign direct
will require confirmation of the origin of that investment in Spain is suspended in the following
isolation by the competent health authority. cases:
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Quick guide for foreigners about Spain
1. if the foreign investor is controlled directly or has established that terms are suspended and that
indirectly by the government, including public deadlines provided in procedural laws are generally
bodies or armed forces, of a third-party country; interrupted for the jurisdictional orders
2. if the foreign investor has made investments or The interruption will not apply in the following cases:
participated in activities in sectors that affect
safety, public order and public health in another • In the area of law on administrative disputes,
Member State; those related to the protection of fundamental
rights of a person.
3. if an administrative or judicial proceeding has
been opened against the foreign investor in • Within labor law, collective conflicts and those
another Member State or in their State of origin for the protection of fundamental rights and
or in a third-party State for carrying out criminal public liberties.
or illegal activities.
• Within civil law, the measures related to
3. Representation Offices the protection of minors or non-voluntary
internment due to mental disorder.
3.1 Tax payment postponements |
Tax deductions on salaries The procedures and resolutions that refer to
situations closely related to the facts justifying
One of the most important financial aid measures of the State of Emergency will not be affected by the
the First Action Plan was the possibility to defer or provision.
pay tax debts in installments for SMEs under certain
conditions:
1. the debtor is a person or entity with a volume of
operations of less than 6 million euros in 2019.
2. the term will be 6 months.
3. no default interest will be accrued during the
first 3 months of deferment.
3.2 Suspension of administrative, civil and
procedural deadlines
In relation to procedural deadlines, the government
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Quick guide for foreigners about Spain
In-person procedures (application for and collection 2. the term will be 6 months.
of residence cards, return authorizations, and initial,
3. no default interest will be accrued during the
in-person residence permit applications) have been
first 3 months of deferment.
cancelled and will be rescheduled after the State of
Emergency. It should be noted that these deferrals are also
exceptionally applicable to natural and legal persons
4. Spanish companies or with the following debts, provided that their global
amount is below 30 thousand euros:
subsidiaries owned by
non-residents • Those corresponding to tax obligations that
must be met by the withholding agent or the
4.1 Tax payment postponements: VAT, person required to make payments on account
(DEDUCTIONS).
Corporate Income Taxes and other taxes
• Those derived from taxes that must be legally
One of the most important financial aid measures of
passed on unless it is duly justified that the
the First Action Plan was the possibility to defer or amounts to be passed on have not been
pay tax debts in installments for SMEs under certain effectively paid (mainly VAT (IVA)).
conditions:
• Those corresponding to tax obligations that the
1. the debtor is a person or entity with a volume of obligor must make in installments as Corporation
operations of less than 6 million euros in 2019. Tax (PAYMENTS MADE IN INSTALLMENTS).
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Quick guide for foreigners about Spain
4.2 Extraordinary measures are applicable • Application of irregular workdays.
in relation to formulation deadlines and • Possibility of substantial modifications to
rendering of annual accounts for the 2019 individual working conditions.
financial year
• Temporary closure of the company and the
1. The sessions of the governing and administrative corresponding suspension of contracts due to
bodies may be held by videoconference that force majeure.
ensures the authenticity of the connection in
real time with image and sound of the remote • Possibility of undertaking temporary redundancy
attendees. due to economic, technical, organizational and
production reasons.
2. Although the statutes had not provided for it,
during the State of Emergency, the agreements Particular reference to ERTE procedures
of the governing and administrative bodies may
Given the current situation, a large number of
be adopted by written vote and without session
companies are carrying out temporary redundancies
whenever the president decides and should be
(ERTE), whose objective is to:
adopted in this way when requested by, at least,
two of the members of the body. • suspend labor and employment relations, or;
3. The period of three months from the end of • reduce the working day temporarily by between
the fiscal year to formulate the annual accounts 10% and 70%.
is suspended until the end of the State of
Emergency, resuming again for another three Conventional ERTE (for economic, technical,
months from that date. organizational and production reasons). The
procedure established by law must be carried
4.3 Applicable labor measures during the out and the effects will last as long as the reasons
COVID-19 situation. remain.
According to labor legislation, the following options ERTE due to force majeure (because of the
are available to companies during the COVID-19 coronavirus crisis) is limited to the period in which
situation, starting with the least burdensome: the extraordinary situation of COVID-19 continues,
specifically to the duration of the State of Emergency
• Working from home. and its possible extensions.
• Possible arrangements for workers to take It is important to consider that, the suspension
vacations. of temporary contracts, including training, relief
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Quick guide for foreigners about Spain
and interim contracts will mean interrupting the 4.4. Aid for companies in relation to Social
calculation of both the duration of these contracts Security contributions
and the reference periods equivalent to the
suspended period. Exemption of Social Security contributions. In cases
of ERTE procedures due to force majeure, there
For both types of ERTE procedures, the recognition is an exemption for companies of the payment of
of the unemployment benefit will be initiated by a 75% of the business contribution to Social Security,
collective application filed by the company acting reaching 100% of the quota in the case of companies
on behalf of the employees within 5 days from the with less than 50 employees, with the requirement
ERTE request due to force majeure, or from the date of maintaining employment for 6 months after the
the company notifies the labor authority of its final restart of activities.
decision in the case of procedures for ERTE by ETOP.
Social Security allowance for discontinuous
The non-transmission of said communication will permanent contracts. In order to support the
be considered a serious infraction, according to the extension of the period of activity of employees with
provisions of the Law of Infractions and Sanctions of discontinuous permanent contracts in the tourism,
Social Order (LISOS). commerce and hospitality sectors linked to tourism
Control and sanction of the applications presented activity, Social Security allowances are applied to
for ERTE in relation to their inaccuracy or falsity of cover contracts from February to June 2020.
the data provided, and reimbursement of undue Specifically, companies may apply an allowance
benefits during said months of 50% of business contributions
Applications submitted by companies that contain to Social Security for common contingencies,
falsehoods or inaccuracies in the data provided will as well as for the concepts of joint collection of
be subject to sanction. The application for ERTEs Unemployment, FOGASA (Wage Guarantee Fund)
without “sufficient” connection to the cause and and Professional Training of said workers.
that generates undue benefits, will be punishable. Moratorium and deferral of social security
Undue recognition of benefits for reasons not contributions as a result of COVID-19
attributable to the employees will lead to ex officio The General Treasury of Social Security may grant
review of said benefits. Consequently, the company moratoriums of six months, without interest, to
must pay in to the managing entity those amounts companies and self-employed workers, who request
received for unemployment, deducting them from it and comply with the requirements and conditions
the wages not received. All this, without prejudice to that will be established by Order of the Minister of
the corresponding administrative or criminal liability. Inclusion, Social Security and Migration.
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The moratorium when granted, will affect the the payment of contributions as a consequence of
payment of their contributions to Social Security suspension of employment contracts or reduction of
and for concepts of joint collection, when they have working hours due to force majeure.
not suspended their activity due to the State of
Emergency, whose accrual period is: Requests that contain falsehoods or inaccuracies in
the data provided will give rise to the application
• For companies: between the months of April of the corresponding sanctions, and surcharge and
and June 2020. interest will be applied.
• For the self-employed: between May and July Companies and the self-employed, as long as they
2020. do not have another deferral in force, may request
the deferral in the payment of their debts to Social
The deadline to request the moratorium will be Security during April, May and June 2020, in the
during the first 10 calendar days of the statutory terms generally foreseen for deferrals, and with a
income terms corresponding to the accrual periods special interest rate of 0.5% instead of the ordinary
already indicated. There will be no moratorium on one. The request must be submitted within 10
the contributions whose statutory term of income calendar days of the corresponding month.
has ended before the request.
The granting of the moratorium will be communicated GD accepts no responsibility for any errors, omissions
within 3 months of the request. or misinformation in this guide and accepts no liability.
No reader should act on any matter contained in this
publication without considering appropriate expert advice
The moratorium may not be requested by from their professionals..
companies, which have obtained exemptions to
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BARCELONA
C/ Roc Boronat 147 VALENCIA
08018 Barcelona Av. Aragón, 30 bajos
T. (+34) 93 270 24 05 46021 Valencia
T. (+34) 96 339 1 1 1 7
BILBAO
C/ Ercilla, 17 3º ZARAGOZA
48009 Bilbao C/ Joaquín Costa, 4 3º izq.
T. (+34) 94 435 26 44 50001 Zaragoza
T. (+34) 97 622 76 69
MADRID
C/ Zurbarán, 9 local drch.
28010 Madrid
T. (+34) 91 524 71 50
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