In the recently published Royal Decree 7 / 2020 of last March 12, the Spanish Government has relaxed the requirements to defer or fraction the payment of tax debts which are lower than 30,000.00 €, for taxpayers whose 2019 turnover did not exceed 6,010,121.04 € and in relation to tax returns whose filing and payment term runs from march 13 to may 31, 2020.

defer Spanish tax debts

These new regulations also permit deferring or splitting tax debts that do not usually fall under this option such as withholding taxes, VAT or Corporate income tax advanced payments.

If the above requirements are met, the payment term shall be of 6 months, and no interest for late payment shall be paid during the first three months.
Taxpayers not meeting these requirements but having contextual treasury problems may also apply the mechanisms for the deferral or fractionation of tax debts that Spanish tax regulations permit.

✔ Spanish tax regulations permit the deferral or split of tax debts’ payment when the debtor’s economic and financial situation cannot face the debt payment in due term. Such situation must be of a transitory nature as the debtor must be able to generate resources to face the debt deferral or splitting. The Spanish tax authorities’ collection department will evaluate, in a discretionary manner, such transitory nature as the absence or shortage of treasury resources must be conjunctural rather than structural.

The Double tax Convention between Spain and Chile

✔ Some tax debts are expressly excluded from the deferral or splitting option such as withholding taxes, VAT or Corporate income tax advanced payments.

✔ As a general rule, deferred or split debts need to be guaranteed, preferentially with a bank guarantee. Only tax debts not exceeding 30,000.00 € are excluded from this guarantee obligation. In order to compute this limit, debts from the same debtor whose deferment or splitting request is pending resolution as well as deferred or fractioned debts pending payment (except if these are dully guaranteed) are added to the new debts’ deferral or fractioning request.

✔ For the deferred debt or for each fractioned debt, late payment interest shall be due, for the period running from the end of the voluntary term of payment up until the end of the term granted. Late payment interest is the legal interest rate in force throughout the accrual period, increased by 25%, except if the Budget Law rules out a different rate. In the event that the debt deferral or fractioning is accompanied of a joint bank guarantee or with Credit and Security Assurance, the applicable interest will be the legal interest rate.

✔ Companies whose 2019 turnover has exceeded the limit of 6,010,121.04 € or that, without surpassing this limit, have debts exceeding 30,000.00 €, need to analyse whether they can defer or fraction the payment of tax debts due to contextual treasury problems that they may face in the current scenario.

What you need to know about Spanish tax rulings

Publicado el 03-2020 por PBS