Today, the Council of Ministers approved a Reinforcement Plan for the hotel industry, tourism and commerce with new measures that aim to alleviate the situation of companies and freelancers related to these activities and meet their fixed costs such as salaries, leases or payment of taxes , among others, to allow them to maintain their viability and not be forced to close as a result of the pandemic.
For the Minister of Industry, Commerce and Tourism, Reyes Maroto, “It is a battery of measures necessary for sectors that have been severely affected by the pandemic and that need more protection so that they can maintain their activity and employment. It was a commitment of this Government and we have fulfilled it so as not to leave anyone behind. The measures we approved today reinforce existing ones such as ERTEs, where we incorporate new hyper-protected sectors – such as restaurants and food stalls – and we create a new ICO line for these sectors with public guarantees of 90%. There are also new measures such as tax cuts, tax debt deferrals and social security contributions. Also noteworthy are the measures to reduce the burden of rents that apply to both large holders and other lessors, incorporating tax incentives in the latter case. In short, the Government approves a new package of measures to guarantee the survival of companies and maintain employment in strategic sectors for our country. A plan that also complements the aids that have been approved by different autonomous communities and municipalities, which can also be reinforced within the framework of their competences, since this will achieve greater protection for the sectors that need it most ”.
The measures contained in the Plan are divided into five large blocks:
Block 1.- Measures aimed at leasing business premises
In the event that the landlord is a large holder (10 or more premises) if the parties do not reach an agreement, the lessee who is an SME or self-employed person may choose between the following alternatives:
A.- A 50% reduction in the rental rent for the duration of the state of alarm, its extensions, and up to a maximum period of four additional months from the end of the state of alarm.
B.- A moratorium on the payment of the rent for the duration of the state of alarm, its extensions and up to a maximum period of four additional months from the end of the state of alarm. The deferred payment of the rents may be made during a period of two years from the end of the moratorium.
The potential number of local beneficiaries would be 190,000, of which 33,000 correspond to premises related to tourism and 157,000 to commercial premises.
For the rest of the landlords of premises, a tax incentive With which it is intended that the natural persons who rent the premises in which certain economic activities related to the tourism sector, hospitality and commerce are carried out, voluntarily agree to reductions in the rent corresponding to the months of January, February and March 2021, allowing to compute as a deductible expense for the calculation of the return on real estate capital the amount of the rent reduction agreed during such months. This incentive has an estimated cost of € 324M and allows deducting up to 100% of the amount of the monthly rent in the event that the landlord lowers the entire rent. It is estimated that 323,701 lessors can take advantage of the measure
Block 2.- Liquidity and solvency measures
The first is the widening of the lack of loans guaranteed by ICO lines and by the reciprocal guarantee companies of the different autonomous communities with re-guarantee from CERSA, as well as their amortization period, a measure approved on November 24 by the Council of Ministers. Specifically, the extension for an additional year of the grace period was implemented for the repayment of ICO loans, as long as the total grace period does not exceed 24 months, and of the SGR guarantees with re-guarantee from CERSA, as well as the period amortization, in a maximum of 3 years, without being able to exceed 8 years the total maturity of the operation. This measure will benefit more than 256,000 companies in the tourism, hospitality and commercial sectors and implies a reduction in financial effort as a result of the postponement in the repayment of principal and interest on loans guaranteed by the State.
The second is the creation of a new section of the ICO guarantee line approved in Royal Decree-Law 25/2020, for SMEs and the self-employed in the tourism sector, hospitality and related activities endowed with € 500M and with up to a 90% guarantee. This line will allow companies heavily affected by COVID-19 such as travel agencies, discretionary transport and the accommodation sector to obtain financing by increasing the public guarantee of guarantees by 10 points compared to the ICO COVID-19 line.
On the other hand, travel agencies and tour operators and reservation services may use the financing endorsed by the ICO for the return of customer advances for package tours and compensation rights.
Finally, within this block of financing, the creation of a Reciprocal Guarantee Society of an exclusively tourist nature is proposed, which aims to facilitate access to financing through guarantees. Its capacity to inject liquidity is 700% of its capital.
Block 3.- Tax measures
First, a new edition of the deferral of tax debts which was regulated by Royal Decree-Law 7/2020, which allows deferral for 6 months, with 3 without interest, upon request, tax debts corresponding to declarations-settlements and self-assessments whose term of presentation and income ends from day 1 from April to April 30, 2021, both inclusive, so that instead of entering in April, debts would be paid in October. In this way, possible treasury tensions that SMEs and the self-employed may experience are avoided. The potentially deferred amount would amount to some 2,668 million euros. The total number of people benefiting from the postponements would be about 617,000 taxpayers, of which about 92,000 are from the HORECA (hotels and restaurants) and 68,000 taxpayers are from retail trade.
Another tax measure included in the plan is increase the reduction in taxation by the module system in personal income tax from the current 5% to 20% in general by 2020. However, for the sectors that have been most affected by the measures adopted to combat COVID-19, such as the hospitality, commerce and tourism, that reduction in taxation by modules it will reach 35%. This measure will be applied for the fourth installment payment of 2020 and for the first payment of 2021. In fact, the reductions of 20% in general and 35% for tourism, hospitality and commerce, will also be applied in taxation of the simplified VAT regime corresponding to the accrued share of 2020 and the first quarterly installment of 2021. The estimated amount of the reduction of personal income tax or VAT would amount to € 117 million. The number of beneficiaries of this measure for the tourism and commercial sector is 132,000 contributors.
Other tax measures are the reduction of the number of tax periods affected by the waiver of the objective estimation method in personal income tax; the exemption provided for remuneration in kind for the company canteen service, applicable to the consumption of food both in delivery and take away; the deductibility of losses due to impairment of the credits derived from the possible insolvencies of debtors and the reduction of the term that the amounts owed by the lessees are considered to be a doubtful balance.
Block 4.- Labor measures and Social Security
The exemptions provided for in the first additional provision of Royal Decree-Law 30/2020 are extended from social measures in defense of employment to certain economic sectors to the following subsectors that become hyper-protected: wholesale trade of beverages, restaurants and food stalls, beverage establishments, and activities of botanical gardens, zoos and nature reserves .
This measure is applied in December 2020 and January 2021 and its extension will be determined in the new social agreement that is being negotiated with unions and employers for all sectors protected by the ERTE.
Other measure includes the postponement in the payment of Social Security contributions. It is an extension of the measure adopted in RDL 11/2020. This measure has been included in the PGE 2021 Law and companies (fees accrued between December 2020 and February 2021) and self-employed (fees accrued between the months of January to March 2021) may benefit. The interest rate for deferrals will be 0.5% and the impact will amount to 205 million euros.
In the field of Social Security, companies engaged in activities framed in the tourism, trade and hospitality sectors, may apply a 50% discount on Social Security contributions for hiring discontinuous fixed lines from April to October 2021. The cost will be about 73 million euros.
Block 5.- Regulatory measures
Requirements for maintaining regional incentives are made more flexible. Regional incentives are financial aid granted by the Government to productive investment to promote business activity, orienting its location towards specific areas. They consist of non-refundable grants and are intended to alleviate inter-territorial imbalances. It is estimated that this measure will benefit some 615 business investment projects that are currently in force or in the phase of maintaining employment and / or investments, with a total associated subsidy of more than € 740 million, of which around 40% correspond to aid to the tourism sector.
I also know extends moratorium to file bankruptcy.
Finally establishes a transitional regime for areas with high tourist influx by 2021. The pandemic has caused the fall of tourists, so the areas would not meet the established criteria. For this reason, the data referring to the year 2020 on inhabitants, overnight stays and cruise passengers in ports where tourist cruises operate will not be applicable. The average of the previous three years will be used.