Hiring workers in Spain

Income Tax Return and ERTE

We are pleased to inform you of the entry into force of the Order approved by the Treasury on 6 April, which establishes an extraordinary instalment payment for the payment of the tax debt derived from the Personal Income Tax return for all those beneficiaries during the past year 2020 of benefits linked to Temporary Redundancy Proceedings (ERTE).

In other words, all those employees affected by an ERTE in the 2020 tax period and who, as a result, have received any benefit, will be able to benefit from this new measure.

However, it will not apply to taxpayers who acquire their tax residence in Spain as a result of their move to Spanish territory, who may opt to pay non-resident income tax, in accordance with the special regime provided for in Article 93 of Law 35/2006 on Personal Income Tax.

It should also be noted that this measure will be entirely voluntary for the taxpayer and that it is configured as a further option for the taxpayer, its application being incompatible with the instalments provided for in article 62.2 of the Personal Income Tax Regulations and with the general regime of deferment or instalments provided for in article 65 of the General Tax Law.

This order, approved with the aim of reducing the impact of the COVID-19 pandemic on citizens’ compliance with their tax obligations, will allow the payment of the tax debt resulting from last year’s Income Tax Return to be paid in six months’ instalments, in the event that it is payable, both in cases of individual and joint taxation.

Normally, all taxpayers who are obliged to pay after filing their income tax return have two deadlines to do so: the first, at the end of the income tax campaign, and the second, in November.

This measure provides greater flexibility since payment of the debt will be made in six instalments, due on the 20th of each month, with the first instalment due on 20 July 2021.

Moreover, no interest for late payment will accrue during this instalment payment and no guarantee will be required.

Furthermore, the application for payment by instalments is subject to certain conditions:

The Ministerial Order has been published on the same day as the start of the 2020 Income Tax Campaign, which begins on 7 April and lasts until 30 June 2021.

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