Below is a list of economic measures approved by the Government to try to alleviate the effects of the COVID19 crisis.
ERTE (Temporary Employment Regulation File)
- Government grants 70% of salaries and exempts the payment of social security contributions (from 75 to 100%).
- Companies must maintain employment levels six months after resuming activity if they have been exempt from social security contributions (75 to 100%).
- Those with less than 50 workers will not pay contributions.
Businesses with a single worker may also benefit from these conditions.
The Government agrees to extend the ERTE beyond the end of the State of Alarm, as requested by employers and unions.
During the alarm period, a delay in filing an unemployment benefit or a resumption “will not reduce the duration of the entitlement to benefit.”
A self-employed person who applies for unemployment payments will have to be up to date with the payment of contributions to the Social Security or regularize them within 30 days.
Workers dismissed during the trial period since March 9, and those who voluntarily terminated the contract since March 1 due to a job offer that has declined may collect unemployment.
The Government provides rental aid, suspends evictions for six months, and contracts will automatically renew for half a year if they expire now. Vulnerable tenants (unemployed, affected by an ERTE or self-employed) will be able to apply for microcredits at zero interest to repay up to 10 years, and the State will assume the debt if the vulnerability is maintained. Large tenants, such as investment funds, will have to choose between collect half the rent or restructure the debt in instalments.
Entrepreneurs may renegotiate the payment of rent for business premises, particularly those owned by large holders or public companies. In the case of other owners, the deposit will be used to pay and will have to be repaid in one year.
Social Security contributions
The self-employed and companies will be able to postpone the payment of their Social Security contributions for six months and the payment of their debts is also postponed until June 30, 2020 – there will be no interest if they had no debts prior to the State of Alarm. The fee for days not worked in March will be returned in the second half of May, as reported by the Social Security Treasury.
Any self-employed person who has been severely interrupted or reduced has the right to a benefit that will at least reach 950 euros.
In general, companies are obliged to pay contributions on time and must register and cancel workers in Social Security despite the State of Alarm and the saturation of the Public Employment Services.
The Government decreed the paralysis of the economy in non-essential sectors from March 30 to April 9. After the break-in Easter, activity has resumed. The construction returns with limitations; there is no work in rehabilitation and reform works. Workers who have stayed at home are paid by paid leave but will have to make up the hours before the end of the year.
During the coronavirus alert, cutting off water, electricity or gas supplies to vulnerable households is prohibited. Also, the social bonus for beneficiaries pending renewal of the application is automatically extended until September 15. The discount on the electric bill can reach 40%.
Workers who become unemployed or lose a substantial part of their income (at least 40%) and employers whose sales plummet may defer payment on their mortgages until May 3. The moratorium only applies to permanent residence.
Domestic and temporary employees
The Government has approved in the Council of Minister’s extraordinary subsidies of 440 euros for temporary workers who did not have the right to unemployment; and for domestic workers, 70% of the base of their contribution, without being incompatible with other jobs.
The Government extends the deadlines for submission and payment of Taxes
The Government extends the deadlines for the filing and payment of quarterly tax returns for self-employed and SMEs (VAT, Personal Income Tax and Company divisions). Thus, they will be able to present themselves until May 20, instead of doing it on the scheduled deadline, which ended on April 20, and until May 15 in the case of domiciled ones, which expired on Wednesday, April 15.
The Government approved on March 24 the launch of the first tranche of guarantees of 20,000 million to guarantee the liquidity of the companies most affected by Covid-19. Half of that amount will serve to guarantee new loans to SMEs and the self-employed. The guaranteed line went into effect on Monday, April 6. Entrepreneurs ask that the amount be increased to 50,000 million.
Notary fees are reduced by 50% for the novation of loans (excluding mortgages).
Research and Development
In the face of the health emergency caused by Covid-19, public institutions of science, technology and innovation may establish extraordinary working hours. These extra hours will be compensated with the productivity supplement or through bonuses. The Ministry of Science will give extraordinary credits to the Carlos III Health Institute (more than 25 million euros) and the CSIC (4.4 million).
The science and technology parks will have financial relief, and they will be able to postpone or split loan instalments to avoid their stoppage. The Barcelona Supercomputing Center Consortium may borrow to meet its international commitments (EuroHPC project).
The unemployed, workers with an agrarian subsidy, agrarian income or unemployment benefit will be able to work in the fields without losing their unemployment, according to a royal decree of the Government. Also, foreigners who will have their work permits renewed if they end before June 30, and young foreigners between 18 and 21 years of age who will be issued a work permit. The contribution of agricultural workers is reduced during periods of inactivity in 2020.
Farmers who applied for loans to face the drought of 2017 will be able to agree with the banks a grace period and extend the repayment period. The Ministry will assume the cost of the guarantees. Applications can be submitted in the next four months.
Social Security will compensate for the payment of wages to workers who have to stay home or reduce their hours to care for family members.
The self-employed who have ceased their activity due to the coronavirus and people affected by an ERTE may redeem the contributions made to the pension plans to alleviate their liquidity needs. The redemption of pension funds is facilitated, the circumstances, the term and the maximum amount available can be defined.
Purchases and returning rights
The deadlines for returning purchases are interrupted for the duration of the Alarm for both face-to-face and online shopping. Usually, the products can be returned in a month. The time will count again when the Alarm state ends. The consumer is protected in contracts for the sale of goods and the provision of services whose execution is impossible due to the pandemic.
Given the possibility that some companies may have liquidity problems to make the income from specific self-assessments, the Tax Agency will adapt its operations. Thus, companies that avail themselves of the liquidity mechanism offered by the decree will not receive constraints for non-payment of taxes until the financing line reaches them.
Bankrupt companies have no obligation to file for bankruptcy. Two months will have to elapse from the end of the State of Alarm so that the judges can admit these requests for the necessary contest for processing.
Listed companies that would have to hold their shareholders’ meetings at the end of June will have four more months, until the end of October. Besides, the Government allows them to be held electronically by the coronavirus, although it is not contemplated in the companies’ bylaws.
In public works projects paralyzed by the pandemic, the concessionaire “may restore economic balance by extending its initial duration to a maximum of 15% or by modifying the economic content clauses included in the contract”.
The Government estimates the cost of additional measures to the liquidity package of 200,000 million euros, 117,000 million public and the rest private, which articulates the royal decree, at around 5,000 million euros. This is the case of the ERTE and the rest of the non-financial measures.
Together to this, there are some private aids to self-employed and SME’s:
Santander, BBVA and CaixaBank have led aid to this group from banks. The former has launched pre-granted loans for SMEs, valued at € 20 billion. BBVA and Caixabank have also opted for credit lines valued at 25.00 billion to companies affected by COVID-19.
Extra gigabytes at no cost to clients clients has been the most common. Movistar and Vodafone have offered 30GB and 50GB, respectively, while Amena and Pepephone have done so with 10GB and 5GB, respectively.
Vodafone, on the other hand, gave away free unlimited data for all its professional clients until the end of March. Like Movistar, it has also expanded its content offering. MásMovil has chosen to give its customers three months free through the Sky TV platform.
Iberdrola will allow invoices to be divided up to 12 months at no cost to SMEs, while Naturgy will do the same with its electricity and gas bills.
For its part, Endesa has decided to suspend power cuts due to non-payment during the health crisis.
In terms of mobility, Renfe will maintain the option to cancel the tours for free until April 30.
As regards training, freelancers will be able to conduct webinars with SeedRocket on different matters from the business sector, as well as get free audiobooks through Amazon thanks to Audible.