What taxes we can postpone due to the coronavirus?
Last Friday the 13th, Royal Decree-Law 7/2020 was approved, in which there is a measure of transitory financial support applicable to the self-employed and which is related to the granting of deferrals of future taxes.
Obviously it is not about the decisions that the group of self-employed demanded, but for now, it is what we have, so we are going to try to get the most out of it by answering the questions that you have surely asked yourself.
What taxes can I ask for deferral?
All those whose presentation and entry period ends between March 13 and May 30. This means that the self-employed may request the deferral of taxes corresponding to the first quarter of 2020.
Will I be able to postpone taxes that are considered undeferrable?
Yes, you are going to be able to postpone all the VAT you pay, even if it is charged. I remind you that the norm establishes that only the VAT that you have not collected from your clients is deferrable, but with this transitory measure, they allow you to defer everything.
On the other hand, you will also be able to postpone the withholdings. Thus, if you have to submit form 111 (withholdings from professionals or workers) or form 115 (withholdings from rentals) you can postpone them.
When will I have to pay?
The term will be 6 months and you cannot choose another one. I explain it to you with an example:
You submit form 303 from 1Q2020 with an amount to be paid of € 1,200 and request this exceptional deferral. The payment date of those € 1,200 will be 10/20/2020, that is, 6 months after the date of presentation of the form (04/20/2020).
Will I be able to split the payment into monthly instalments?
No, you won’t. The measure only contemplates the possibility of postponing the full payment, if you want to split the payment you will be able to use the deferral/fractionation system previously regulated, but you will not be able to postpone the deferrable taxes.
What about default interest?
Well, you will not be charged the interests during the first 3 months of the deferment, which means that if you want to make the payment before the completion of those 3 months, the deferment will have no cost.
If you wait for the 6 months that you are allowed to pay to complete, you will be charged the default interest that is generated from the fourth to the sixth month.
The Tax Agency has published provisional instructions to request these deferrals. Here we leave the link in Spanish (there isn’t an English translation).
And so far this financial support measure that attempts to alleviate the lack of liquidity of the self-employed as a result of the coronavirus crisis.
We will be very aware this Tuesday, March 17, to the approval of the packages of economic and labour measures that the President has announced as part of the plan to deal with the current crisis.