Covid-19 Postponements

The crisis generated by the Coronavirus or Covid-19 has affected us, not only at a personal and health level, but also at an administrative level. During the period that the State of Alarm was in force, the State, the Autonomous Communities and the Town Halls have made an unprecedented legislative effort to try to ensure that the taxpayer – at a fiscal level – or the citizens – at a general level – were not extremely harmed by the situation. Once the end of the State of Alert was decreed, which, let’s remember, happened last June 21, the Public Administrations have continued adapting their regulations to the current situation.

Although these measures have affected many administrations, in this article we will focus on how the main taxes are being affected today, that is, more than three months after the end of the State of Alert.

Personal Income Tax

With regard to extensions of time, the specific regulations that have come into force as a result of Covid-19 have not had any impact on Personal Income Tax, since the deadline for filing them has not changed.

However, it should be noted that by virtue of Additional Provision 1 of Royal Decree Law 15/220, of 21 April, on urgent complementary measures to support the economy and employment, amending Article 33 of Royal Decree Law 8/2020, of 17 March, on urgent extraordinary measures to deal with the economic and social impact of COVID-19, and the eighth and ninth additional provisions of Royal Decree Law 11/2020, of 31 March, adopting additional urgent measures in the social and economic field to deal with COVID-19, the prescription period will be extended by 78 more days, because the days between 14 March and 30 May of this year are not counted. This “non-computation” of the prescription period regulated in Article 66 of the General Taxation Law 58/2003, of December 17 (hereinafter, “GLT”) also applies to the following fiscal years: 2016, 2017 and 2018.

Inheritance and Gift Tax

As it is well known, it is a tax whose competence and collection has been transferred by the State to the Autonomous Communities, being, therefore, the ones in charge of the management and liquidation of the Tax.

It should be borne in mind that the general time limit for settling inheritance and gift tax is 6 months from the date of death of the deceased or 1. In this respect, the Autonomous Community of Catalonia published Decree Law 23/2020, of 9 June, on urgent tax measures, in which it establishes a new tax calendar for the declaration of inheritances, making a distinction according to the date of accrual of the tax:

  • For taxable events prior to March 14, 2020, that is, those inheritances in which the deceased died prior to the declaration of the State of Alarm, in which the period for presentation and payment had not ended, the period resumed again on July 1, adding 2 additional months to the time remaining to exhaust the 6 months of the usual period.
  • In the case of taxable events occurring between March 15 and June 30, 2020, the period for filing and payment of the tax began on July 1, and therefore ended on January 2, 2021.

Corporate Tax

The presentation of the Annual Accounts for 2019 has also been affected by the coronavirus and, therefore, so has the presentation of the Corporate Income Tax.

The aforementioned Royal Decree-Law 8/2020, after further amendments established by Royal Decree-Law 11/2020, of 31 March, and by Royal Decree-Law 19/2020, established:

“3. The obligation to draw up the annual accounts, ordinary or abridged, individual or consolidated, within three months of the close of the financial year incumbent on the governing or administrative body of a legal person and, where legally required, the management report and other documents required under company law, is suspended until 1 June 2020, and is resumed for a further three months from that date. Notwithstanding the foregoing, the formulation of the accounts by the governing body or administration of a legal entity during the state of alarm shall be valid, and the accounts may also be verified within the legally stipulated period or by making use of the extension provided for in the following paragraph.

4. In the event that, on the date of declaration of the state of alert or during its validity, the governing body or administration of a legal entity has drawn up the accounts for the previous financial year, the period for the accounting verification of these accounts, whether the audit is obligatory or voluntary, shall be understood to be extended by two months from the end of the state of alert.

5. The ordinary general meeting, in order to approve the accounts of the previous financial year, shall necessarily meet within two months from the end of the period for drawing up the annual accounts”.

This means that, under Royal Decree-Law 19/2020, non-listed companies must have their accounts approved by 1 November 2020.

As regards the presentation of corporate income tax (“IS”), the presentation of this tax has been permitted without prior approval of the financial statements for 2019. Likewise, the possibility was established that, in those cases in which, after the approval of the same, they were different from those already presented, a new self-assessment of the IS could be presented without the application of any surcharge until November 30.

This implies that:

  • This new self-settlement will have the character of complementary if it shows a greater amount to be paid or a lesser amount to be returned. In this case, late payment interest will be accrued, but not the surcharge for late filing without a requirement by the Tax Administration regulated in article 27 of the LGT.
  • In those cases in which the new self-assessment presented results in an amount to be returned, the period of 6 months for the return of the same will begin to count from the period established for the presentation of the new self-assessment, that is, from November 30th. In these cases, if the refund is made as a result of undue income derived from the first self-settlement, interest will be accrued for the taxpayer.

Tax on the Increase in Value of Urban Land

The suspension of deadlines established during the validity of the State of Alarm did not affect the tax deadlines under Royal Decree 465/2020, which amended Additional Provision 3 of RD 463/2020 of 14 March, which declared the state of alarm for the management of the health crisis situation. Therefore, with regard to the commonly known as municipal capital gains tax, the provisions of each city council must be complied with, since they are the ones responsible for managing the tax.

As a general rule -since it is impossible to know the decision of all the Spanish municipalities- it has been decided not to suspend or postpone the deadlines for the liquidation of the Tax. However, it should be noted that, as with inheritance tax, the legislation already provides for the possibility of applying for a 6-month extension for the filing of the capital gains tax.