CORONAVIRUS: Fiscal measures and regulation on contracts suspension

With the publication in the Official State Gazette of Royal Decree Law 8/2020 dated March 17, the regulatory framework that will regulate the ERTEs (Files for temporary suspensions of employments) has been established, as well as other labor and economic measures aimed at mitigating the effects of COVID-19.

Below you’ll find the most relevant measures in tax, economic and especially labor matters. Thus, we shed a little light at a time when information is essential to make the decisions that are best for you. It should be noted that in this article we ignore the protection measures for citizens and basic supplies, measures to streamline public procurement processes, among others, in order not to overload information.

Tax measures

In the fiscal field, news were expected in terms of deadlines and the enforceability of self-assessments such as VAT or personal income tax. None of this has happened, therefore, it should be noted that the taxes corresponding to the first quarter must be presented as usual on April 20 at the latest.

On the other hand, there are modifications regarding other types of procedures.

They last until April 20, 2020:

  • Tax debts in voluntary or executive period whose maturity has not been reached as of March 17.
  • Deferrals and installments already granted that expire between March 17 and April 19.
  • The terms of attention to requirements, seizure proceedings or requests for information from the Tax Agency that expire before April 20.
  • The deadlines for submitting allegations in procedures already started, which expire before April 20.

On the other hand, the terms of the previous assumptions are prolonged until May 20, 2020 (unless its own maturity is higher) in those cases where the procedures are notified from March 17 on.

Labour measures

This is undoubtedly the most dense and extensive chapter. For this reason we opted to cite the articles that come to regulate labor-related measures, and we accompany them with a brief non-technical summary and the necessary citation of the official redaction.

Article 5. Preferred nature of remote work.

Summary: Nothing needs to be done about risk assessment for employees who are working at home.
(…) The obligation to carry out the risk assessment will be understood as fulfilled through a self-assessment carried out voluntarily by the worker himself (…)

Article 6. Right of adaptation of the schedule and reduction of working hours.

Summary: All workers can adapt their schedule as they want if they have to take care of someone, this includes children who cannot go to school and can reduce their workday to as much as they want.
The working people that prove care duties with respect to the spouse or common-law partner, as well as with respect to the relatives by blood relationship up to the second degree of the working person, will have the right to access the adaptation of their working day and / or the reduction of the same.
The right to the adaptation of the working day due to care duties due to exceptional circumstances related to the COVID-19 is a prerogative whose initial specification corresponds to the worker, both in its scope and in its content and may consist of shift change, alteration hours, flexible hours, split or continuous working hours, change of workplace, change of functions, change in the way of providing work, including the provision of remote work Workers will have the right to a special reduction in the working day, but it must be communicated to the company 24 hours in advance, and it may reach one hundred percent of the working day if necessary.

Article 22. Exceptional measures in relation to the procedures for suspension of contracts and reduction of working hours due to force majeure.

Summary: Not all companies will be able to justify the suspension or reduction for a major cause, but if any worker is on medical leave, then we could justify the major cause under Article 22.1 of the RDL. NO agreement between company and workers is required.
Contract suspensions and reductions in working hours that have their direct cause in loss of activity as a consequence of COVID-19, including the  declaration of the state of alarm, which imply suspension or cancellation of activities, temporary closure of places of public influx, restrictions on public transport and, in general, the mobility of people and / or goods, lack of supplies that seriously impede the continued development of the activity, or in urgent and extraordinary situations due to the contagion of the staff or the adoption of preventive isolation measures decreed by the health authority, which are duly accredited, will be considered as coming from a situation of force majeure The procedure will begin at the request of the company, which will be accompanied by a report regarding the link of the loss of activity as a consequence of COVID-19, as well as the corresponding supporting documentation. The company must communicate its request to workers The existence of force majeure must be verified by the labor authority, regardless of the number of workers affected.
The resolution of the labor authority will be issued within five days from the request, after a report from the Labor and Social Security Inspection that will also be evacuated within the non-extendable period of five days and must limit itself to verifying the existence, when appropriate, of the force majeure alleged by the company and will take effect from the date of the act causing the force majeure.

Article 23. Exceptional measures in relation to the procedures for suspension and reduction of working hours for economic, technical, organizational and production reasons.

Summary: Deadlines are reduced, but not the bureaucratic and evidentiary burden of the deadlines. An agreement between company and workers is required.
In case that there is no legal representation of the workers, the representative commission of these for the negotiation of the consultation period will be made up of the most representative unions of the sector to which the company belongs. In case that this representation does not conform, the commission It will be made up of three workers from the company.
In any of the above cases, the representative commission must be constituted within the non-extendable period of 5 days and the consultation period must not exceed the maximum period of seven days.
The report of the Labor and Social Security Inspection will be evacuated within the non-extendable period of seven days.

Article 24. Extraordinary contribution measures in relation to the procedures for suspension of contracts and reduction of working hours due to force majeure related to COVID-19.

Summary: The company contribution is exempt from payment. Savings for the company
The General Treasury of Social Security will exonerate the company from the payment of the business contribution while the period of suspension of contracts or reduction of working hours lasts

Article 25. Extraordinary measures regarding unemployment protection in application of the procedures referred to in articles 22 and 23.

Summary: All workers will be entitled to unemployment benefits and without spend their accumulated unemployment benefit. The amount is 70% of the regulatory base and will be valid until the end of the alarm state. The RDL does not inform how to process it when the offices are closed.
The recognition of the right to the contributory unemployment benefit to the affected workers, even if they lack the minimum period of paid employment necessary for it.
Failure to compute the time in which the contributory unemployment benefit is received and the duration of the benefit will be extended until the end of the period of suspension of the employment contract or temporary reduction of the working day

Sixth additional provision. Safeguarding employment.

Summary: It is mandatory to keep the job 6 months after the alarm state so that all this is valid, if the job is not maintained, all the aid received must be returned or paid
The extraordinary measures in the labor sphere provided for in this royal decree-law will be subject to the company’s commitment to maintain employment for a period of six months from the date of resumption of activity.

First transitional provision. Limitation on application to employment regulation files.

Summary: All those companies that have not waited for the publication of the RDL cannot access the aid, that’s why I had asked you to wait for the publication of the same to keep your interests. Thank you for having responded to my request.
The specialties provided for in article 22 sections 2 and 3 and article 23 of this royal decree-law will not be applied to employment regulation files for the suspension of employment contracts or for the reduction of working hours initiated or communicated before the entry into force of this and based on the causes provided for in it.

Economic measures

In order to ensure the financial viability of companies, the Government has approved the creation of a line of public guarantees for a value of up to 100,000 million euros. Some 117,000 million will be mobilized from public coffers and the rest will be allocated by private contribution (still to be determined).

This measure is in addition to those already announced regarding the protection of the health system, aid to the most vulnerable sectors and specific support to companies in the tourism sector that we are talking about here.

In addition, additional guarantee lines of 2,000 million euros are approved for exporting companies with agile mechanisms, especially favoring small and medium-sized companies.

With all this, the Government of Spain, together with what has already been published, intends to alleviate the impact of COVID-19 and its associated quarantine.

Do not hesitate to contact Deventer Consulting in case you need more information about it.