New changes to deferral of Spanish taxes from 2017

The Royal Decree-Law 3/2016, of 2 December, eliminated the possibility of granting deferrals or installments of certain tax debts, including those derived from the fractional payments of Corporate Income Tax and those derived from taxes, such as VAT, must be legally passed on, unless it is justified that the quotas transferred have not actually been paid.

Processing of deferrals after Royal Decree-Law 3/2016

Requests for deferral or splitting of debts affected by this measure will be inadmissible, while the remaining requests will be processed according to their amount, according to the established procedure, which has not been modified by Royal Decree-Law. Thus, requests for deferral or splitting that refer to debts with a total amount equal to or less than 30,000 Euros will not need to provide guarantees, and will be processed through an automated process. Applications for a higher overall amount must provide the appropriate guarantees and be processed through an ordinary non-automated process. The limit exempt from providing guarantees was raised in October 2015 from 18,000 Euros to the current 30,000 Euros.

Impact of the measure on the self-employed

As regards the self-employed, the measure relating to split corporation tax payments does not affect them, since they are taxed under the IRPF. The measure on the VAT passed affects them, although they will be able to continue requesting deferrals and splitting of VAT if they justify that they have not collected the quotas passed on. Therefore, the main modification for the self-employed is that they must prove that they have not collected the VAT quotas passed, particularly in those applications that exceed the limit free of guarantees.

As a result, the self-employed may apply for deferral, regardless of their amount, of their personal income tax and VAT in the following circumstances, depending on the total amount of the debt:

1. If applications relate to a debt whose total amount is equal to or less than € 30,000, deferments may be granted, without guarantees, up to a maximum of 12 monthly installments, unless the obligor requested a shorter number of installments, In which case, the requested deadlines will be granted. The periodicity of the payments will be, in any case, monthly. They are handled by an automated resolution mechanism.

2. If applications relate to a debt whose total amount exceeds 30,000 Euros, deferrals may be granted, depending on the type of guarantee provided by the debtor, and for a maximum term of 36 monthly installments, unless the debtor has requested a shorter number of deadlines, in which case the requested deadlines will be granted. If the debts are for VAT, it will be necessary, in addition, to prove that the VAT rates passed on have not been paid.