Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality, and trade sectors and in tax matters (BOE 12-23-2020) includes, as its title indicates, measures in the tax area, among which we highlight the following:

Postponement of tax debts

Within the scope of the competencies of the State Tax Administration (Value Added Tax, Corporation Tax, and Personal Income Tax), persons or entities with a volume of operations not exceeding 6,010,121.04 in the year 2020, may request the postponement of the income of the tax debt of all those returns-settlements and self-assessments whose term of presentation and income ends from 04-01-2021 to 04-30-2021, both inclusive, provided that the request is of an amount less than 30,000 euros. The deferral will be 6 months, and no late payment interest will accrue during the first 3 months.

Income modules – VAT

The percentage of reduction to be applied to the net income in objective estimation in the income tax return for the fiscal year 2020 is increased. The reduction is set, in general, at 20%. For the activities that have been most affected by the measures adopted to combat the COVID-19 pandemic, such as those related to the tourism, hospitality, and commerce sectors, including the collective urban transport and road passenger sector, the reduction is set at 35%. The new amount of the reduction will be taken into account to quantify the net income for the purposes of the fourth installment payment corresponding to the year 2020 and to calculate the first installment payment corresponding to the year 2021. RD-law 35/2020 establishes the list of IAE to those that apply.

These new reduction percentages will also be applied in the simplified VAT regime on the amount of the fees accrued in 2020 for current operations, and will also be taken into account to calculate the income on account corresponding to the first quarterly installment of the 2021 financial year. RD-law 35/2020 establishes the list of IAE to which it applies.

Eliminates the mandatory link that is legally established for 3 years for the waiver of the objective estimation method of personal income tax, the simplified regime, and the special VAT regime for agriculture, livestock, and fishing corresponding to the years 2020 and 2021. The waiver of the application of the objective estimation method for the fiscal year 2021 will not prevent the return of economic activity in 2022 from being determined according to said method. Likewise, for those taxpayers who renounced this method in the fiscal year 2020, they are allowed to return to apply the objective estimation method in the years 2021 or 2022.

The deadline for resignations and revocations to the objective estimation method of personal income tax and to the simplified special regimes and VAT for agriculture, livestock and fishing, for the year 2021 is from 12-24-2020 to January 31, 2021.

IRPF. Exempt in-kind work performance

The exemption provided for in income tax for remuneration in kind derived from indirect formulas for the provision of the company canteen service will be applicable when the service is provided on the premises of the hospitality establishment or outside it, after being collected by the employee or through its delivery to their workplace or to the place chosen by the person to carry out their work on the days when it is carried out remotely or by teleworking.

IRPF. Tax incentive to promote the reduction of rental income

The lessors who are not a company or public entity, or a large holder, who has signed a lease contract for use other than housing, or industry, with a lessee who uses the property for the development of an economic activity classified in division 6 (Commerce, restaurants and lodging, repairs) or in groups 755 (Travel agencies), 969 (Other recreational services, nec), 972 (Hairdressing salons and beauty institutes) and 973 (Photographic services, automatic photographic machines, and photocopying services) of the first section of the IAE rates, they may compute in 2021 for the calculation of the return on real estate capital as a deductible expense the amount of the reduction in the rental rent that they would have voluntarily agreed upon as of March 14, 2020 corresponding to the monthly payments accrued in the months of January, February and March 2021.

IRPF. Reduction of the term for the amounts owed by the tenants to be considered a doubtful balance

The six-month period for the doubtful collection balance to be considered a deductible expense for determining the net return on real estate capital provided that this circumstance is sufficiently justified, will be reduced to three months in 2020 and 2021. Therefore, when more than 3 months have elapsed between the time of the first collection management carried out by the taxpayer and the end of the tax period, and there has been no credit renewal.

Deductibility of losses due to impairment of credits derived from possible insolvencies of debtors in small companies in tax periods beginning in 2020 and 2021

Taxpayers of the IS, IRPF, or IRNR who obtain income through a permanent establishment located in Spanish territory that meet the conditions of article 101 of the LIS (small-sized entities), in the tax periods that start in 2020 and in the year 2021, they may deduct, in those periods, the losses due to impairment of the credits derived from the possible insolvencies of debtors when at the time of accrual of the tax the period that has elapsed since the expiration of the obligation is three months (before: months).

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