COVID-19: Tax Deferrals For The Self-employed In 2021
Law and Tax ChangesTax Agency (Hacienda)
There are several changes in the tax deferrals for the self-employed in 2021. On March 13, a new measure came into force (approved in Royal Decree-Law 5/2021; third additional provision) that aims to improve the self-employed and SMEs’ solvency in this year 2021.
It is a special postponement (*) that has these two characteristics:
- The term will be for six months.
- You will pay no late payment interest during the first four months of the deferral.
(*) Suppose you prefer to pay after more months (for example, 1 year), or pay month to month. In that case, you can continue requesting the traditional deferral / fractioning, but you will pay interest from the first month. Not all taxes are deferred (you cannot postpone withholdings and VAT charged).
What taxes can you defer using this special deferral?
- Quarterly withholdings for workers and professionals (form 111).
- Property lease withholdings (form 115).
- Fractional personal income tax payments (forms 130 and 131).
- Quarterly VAT (form 303) – even if you have collected VAT from your invoices.
When can you request this special postponement?
You can request this type of postponement for the taxes of the FIRST QUARTER OF 2021, which you have to submit on April 20.
Is there a limit?
Yes, the maximum tax you can defer is € 30,000.
In this first quarter of 2021, your VAT payable amounts to € 3,000. It would be best if you had liquidity because you do not know how this exceptional situation that we are experiencing will continue to affect you, and you prefer to defer the payment of the tax.
Of the € 3,000 you have to pay, only € 500 has not yet been collected from your clients. Therefore, your advisor tells you that you could only request the postponement for those € 500.
You think it is a short postponement since you would have to pay € 2,500 on April 20. So you contemplate the possibility of requesting this special deferral and ask your advisor what interest cost it will entail.
Well, here are the numbers…
Interest on late payment
The cost of late payment interest for a deferral of € 3,000 to be repaid in 6 months is € 56.40 (183 days). But thanks to the solvency support measure, you will not pay interest for 4 months, so the cost of late payment interest is reduced to € 18.80.
Therefore, on 10/20/2021, you will be charged in the IBAN that you have indicated € 3,018.80.
Make the calculations of your interest on late payment
So that you can make the calculations of the default interest that you will have to pay yourself, you only have to click on this link of the Tax Agency and complete only these fields with these data:
Fecha de inicio (Start date): 20/04/2021
Fecha del primer vencimiento (First expiration date): 20/10/2021
Importe cuota total (€) (Total fee amount in euros): here, you must include the amount of the form you want to postpone.
Do not touch the rest of the fields, and click Calcular.
You have to multiply the amount that appears in the Intereses column by 61 and divide it by 183, so you will obtain the cost of late payment interest that you will pay on 10/20/2021.
What if I don’t want to pay late payment interest?
You have that possibility, and what you must do is pay the debt before 08/20/2021.
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