Tax payment deferrals for the first quarter of 2021.

Royal Decree-Law 5/2021, in force since March 13, introduces a set of extraordinary measures to support business solvency, intended to help sustain the business community through the crisis caused by COVID-19.  Among the tax measures, it expands the options for requesting tax deferrals.

As regards the possibility of requesting tax deferrals, payment of all types of taxes whose filing and payment period ends between April 1 and April 30 may be deferred for six months.

This deferral, already approved by Royal Decree-Law 35/2020, of December 22, 2020, means that deferred debts may be paid in October. It also covers Corporate Income Tax (IS) installment payments and withholdings on payroll and rent, which ordinarily cannot be deferred.

In addition, no late-payment interest will accrue during the first four months of the deferral.  Applicants must not have had a turnover exceeding €6,010,121.04 in 2020, and the deferred amount must not exceed €30,000.00. To apply for these deferrals, applicants must be up to date with their tax obligations.

Which taxes can be deferred?

Among the taxes that the Council of Ministers has included in the possible moratorium are:

– Quarterly withholdings on payments to employees or business owners (Form 111).

– Lease or sublease of real estate (Form 115).

– Personal Income Tax (IRPF) installment payments (Forms 130 and 131).

– Corporate Income Tax payments on account (Form 202).

– Quarterly VAT (IVA) return (Form 303).

Is there a limit?

Yes, the maximum amount of taxes you can defer is €30,000.

Deadlines

Deferral of payment of the tax debt will be granted for all tax returns, tax assessments, and self-assessment returns whose filing and payment period ends between April 1 and April 30, 2021, both inclusive.

How do you apply?

Always within the established period of April 1–30, both inclusive, self-employed workers must file the self-assessment return showing the amounts payable that they wish to defer and select the “acknowledgment of debt” (reconocimiento de deuda) option.