Urgent tax and procedural measures to respond to the economic impact of COVID-19 immediately

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On 13 Friday March, Royal Law-Decree 7/2020, of 12 March was published in the Official State Gazette, adopting urgent measures to respond immediately to the economic impact of COVID-19 ("Royal Law-Decree 7/2020").

From a tax perspective, the Government has granted the possibility to opt for a postponement of the payment of taxes without the need to submit any guarantee or collateral (including exceptionally the deferment of Personal Income Tax Withholdings, VAT quotas and Corporate Income Tax instalment payments, which could not be deferred according to the General Tax Law) limited to 30.000 euros debts and for a period of six months (no late interest being accrued during the first three months). This tax deferment must be requested before 30 May for all tax returns and self-assessments with filing and payment deadlines ranging between 13 March, 2020 and 30 May 2020.

This measure is limited to individuals or entities who have obtained a turnover equal to or less than six million euros in fiscal year 2019 (i.e. SMEs and self-employed workers).

The Tax Agency has published provisional instructions for requesting deferrals in accordance with the provisions of Royal Law-Decree 7/2020.


On Saturday 14 March, Royal Decree 463/2020 of 14 March was published in the Official State Gazette, declaring the state of alarm to manage the health crisis situation caused by COVID-19 ("Royal Decree State of Alarm").

The Royal Decree State of Alarm introduces as one of the measures, the suspension of procedural, administrative and civil deadlines. These are regulated in the Additional Provisions ("AP") of the Royal Decreee State of Alarm.

Suspension of procedural deadlines

On the one hand, the second AP provides the suspension of procedural deadlines until the state of alert ceases, with certain exceptions to avoid irreparable damage.

As far as the social jurisdiction is concerned, the scheduled judicial proceedings and procedural deadlines are suspended throughout the country during the state of alarm. However, in order to maintain essential services, the following actions are maintained: (i) processing of collectives dismissals ("EREs") and staff temporary lay-offs ("ERTEs"), (ii) holding urgent trials declared by law, (iii) the adoption of urgent and preferential preliminary injunctive relief, (iv) collective conflict procedures, and (v) procedures for the protection of fundamental rights and public liberties.

Suspension of administrative deadlines

On the other hand, the third AP suspends the administrative deadlines during the alarm period, which led to believe this measure could also involve periodic tax self-assessment filings, although this issue has been clarified by Royal Decree 465/2020 of 17 March, amending Royal Decree 463/2020 of 14 March, declaring the state of alarm to manage the health crisis situation caused by COVID-19 ("Royal Decree 465/2020"), which is explained below.
Regardless of the above, there is an exception clause for those procedures and resolutions referring to situations closely linked to the facts justifying the state of alarm. 

Furthermore, the declaration of the state of alarm also means the suspension of acts and deadlines for administrative labor conciliation, prior to social jurisdiction trials -actions before regional Mediation, Arbitration and Conciliation Services/Centers-. In this sense, the days that elapse until the lifting of the state of alarm do not count for the purposes of general time limits (20 working days to contest dismissals, 1 year for claim an amount, etc.).

Additionally, for the purpose of processing employment benefits, the State Public Employment Service ("SEPE") offices maintain the telematic and telephone service because of they will remain closed their offices to the public -with exceptions- so that unemployment benefits can be requested by telematic means without losing the right of going through judicial proceedings when this exceptional emergency situation ends.

Finally, there are plans to relax the deadlines for implementing the reduction of the working hours and the suspension of employment contracts procedures, due to force majeure as well as for technical, productive and/or organizational reasons (ERTEs).

Suspension of prescription and expiration periods

Finally, the fourth AP suspends statutory limitation and expiry deadlines during the alarm period.


On Tuesday 17 MarchThe Official State Gazzete published Royal Law-Decree 8/2020 of 17 March, which approved urgent extraordinary measures to face the economic and social impact of the COVID-19 ("Royal Law-Decree 8/2020").

Suspension of tax debt deadlines

In addition to what has already been approved by the Royal Decree State of Alarm, the Central Government has especially regulated the suspension of tax proceedings.

In this sense, Royal Law-Decree- 8/2020 states that the following administrative procedures which have not been concluded before 18 March 2020 will be extended until 30 April 2020: (i) tax debts resulting from settlements released by the Tax Administration, (ii) deadlines for paying tax debts –either during the voluntary or enforceability period-, (iii) for deferrals and/or payment in instalment schemes granted, (iv) terms related to the development of the auctions and awarding of goods, and (v) deadlines for replying to requirements, submitting tax appeals, deadlines for replying to requests, filing of tax appeals, released within procedures stated for the application of taxes, penalties or refund of taxes unduly paid, rectification of material errors and revocation proceedings.

In addition, as part of the administrative enforceability procedure, enforcement of guarantees relating to real estate assets will be suspended from 18 March 2020 until 30 April 2020.

Nevertheless, if the communication notifying the mentioned deadline is received during the effectiveness of Royal Decree State of Alarm, the deadline will be extended until 20 May, unless the ordinary deadline stipulated in the General Tax Law ends after 20 May, in which case the deadline of the General Tax Law would apply.

However, if the taxpayer, without expressly waiving this right, complies with the mentioned tax procedures while the alarm state is in place, the procedure shall be deemed completed.

Thus, it seems unequivocal that the suspension of the terms and the interruption of the administrative deadlines established in the Royal Decree State of Alarm as well as in Royal Decree-Law 8/2020, will not be applicable to tax deadlines, which are subject to special regulations, nor will it affect, in particular, the filing of tax returns and self-assessments deadlines, which will maintain their usual deadline, regardless of being able to request deferrals and/or payment in instalment schemes under the applicable rules.

This has been expressly stated in Royal Decree 465/2020, which establishes that the suspension of terms and the interruption of administrative deadlines referred in section 1 shall not apply to tax deadlines, subject to special regulations (i.e. Royal Law-Decree 8/2020 itself), nor shall it affect, in particular, to the deadlines for filing tax returns and self-assessments. This has also been awarded by the Spanish Tax Agency on its website, which you can consult here.
Likewise, Royal Law-Decree 8/2020 extends the period of suspension of administrative proceedings as regulated by the Royal Decree State of Alarm for other tax proceedings, including the following:

(i) Dates elapsed within the period lasting from 18 March until 30 April 2020, shall not be regarded for the purposes of the maximum duration of penalty and review procedures launched by Tax Authorities (regardless of the Tax Authorities' right to promote, order and carry out the procedures it considers essential), nor for the purposes of the statute of limitation and expiration periods.

(ii) Likewise, for the sole purpose of calculating the prescription periods, in the appeal for reversal and in the economic-administrative procedures, the decisions that declare the termination of the these procedures shall be considered notified when there is evidence of one attempt to notify the decision between 18 March and 30 April 2020.

(iii) As regards of the terms stated for filing economic-administrative claims or claims against tax statements, as well as appealing against the resolutions issued within economic-administrative proceedings, the computation shall not commence until 30 April 2020, or until the notification made under the terms of the General Tax Administration, if this latter takes place after the former.

(iv) Finally, it is granted the suspension from 18 March to 30 April 2020 for the purposes of the maximum duration of proceedings initiated ex officio, regardless of the Tax Authorities' right to promote, order and carry out the procedures it considers essential.

Transfer Tax and Stamp Duty Tax

A new number is added to Article 45.I.B) of the Transfer Tax and Stamp Duty Tax Law approved by Royal Legislative Decree 1/1993, of 24 September, granting an exemption on the gradual quota on Stamp Duty tax to deeds formalizing contractual novations of loans and mortgage credits under Royal Law-Decree 8/2020.


Madrid City Council promotes a package of tax measures amid the mitigation of the negative economic effects of COVID-19 

Madrid City Council has announced the approval on 12 March 2020 by the Governing Board) of certain tax measures applicable for fiscal year 2020 amid the mitigation of the negative economic effects that may occur in certain sectors of the economy as long the individuals or entities maintain the average number of workers, amongst other:

(i) A 25% Property Tax quota reduction allowance for those properties used for leisure, hotel and commercial purposes that are of special interest or municipal utility, conditional upon the maintenance of the average number of workforce during the 2020 tax period. This quota reduction may be requested by the taxpayer before 15 June 2020.

(ii) A 25% Business Activity Tax quota reduction allowance for taxpayers levied on Business Activity Tax headings of leisure and restaurants, travel agencies, commercial agencies and large stores. This quota reduction is granted provided the same conditions as those established for property tax are complied with.

(iii) Finally, a payment postponement has been approved for Motor Vehicle Tax, Passage of Vehicles Tax and ATM Tax.


On 17 March 2020, the Governing Council of the Regional Council of Biscay approved Foral Decree 1/2020, adopting various tax measures aimed at improving taxpayers' liquidity.

The Governing Council of the Regional Government of Biscay has announced the approval on 17 March 2020 of a series of measures, amongst others:

(i) Extension of the deadlines for the filing and payment of February's self-assessments, declarations and tax returns is extended to 14 April 2020. In turn, self-assessments which its expiration date is on or after 16 March 2020 wil be extended 15 workdays. Likewise, the deadline is extended to 1 June for tax returns and self-assessments that are not required to be filed electronically. 

(ii) Exceptional payment postponement without accruing interest on arrears.

(iii) Tax debts payment postponement without the need to file any guarantee or collateral requirement for individuals and small and medium enterprises for tax returns and assessments ending between 16 March and 1 June 2020.
For deferrals and/or payment in instalment schemes already granted, the payment corresponding to the month of March is delayed by one month, without interest on arrears.

(iv) Ex officio tax proceedings whose commencement date was scheduled from 16 March 2020, as well as any action that has to be carry out at the taxpayer's request, unless telematic filing is mandatory, are deferred until 1 June, except for penalty proceedings, ex officio compensations and Personal Income Tax settlement proposals.

(v) Suspension is granted for tax proceedings in progress between 16 March 2020 and 1 June 2020, deadlines for replying to requirements, submitting tax appeals, deadlines for replying to requests.

(vi) The Regional Council of Biscay has also announced its intention to anticipate the refunds planned for the coming months (i.e. VAT, Personal Income Tax).

(vii) Finally, a waive in filing and payment of Personal Income Tax payers who carry out economic activities' installments have been granted for the first and second quarter of 2020.

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