The Government approves a rescue plan for the hospitality industry with an impact of 4,220 million

This plan includes a mandatory 50% reduction for large property owners and tax holidays.

a month late, the Council of Ministers has approved a Royal Decree Law on aid to the hospitality and tourism sector that the Minister of Finance and Government spokesperson, María Jesús Montero, has described as “ambitious” since will have an impact of 4,220 million euros through measures such as tax cuts and rent extensions.

The plan foresees acting in five blocks and objectives, such as clearly reduce the cost of business to reduce the fixed cost of leasing. The second is to provide liquidity so that they can meet spending commitments. The third seeks to alleviate the fiscal burden by lowering taxes or postponing those fiscal obligations until the activity is less.

“In the fourth we reduced the price and in the fifth we made some of the regulatory measures more flexible”, explained the Government spokesperson during the press conference after the Council of Ministers.

Within this plan, includes a mandatory 50% rebate for large holders of real estate in the amounts of rent of premises for the hospitality industry and commerce. The impact on the public coffers, which is estimated to be very limited, would come from the tax exemptions for small owners, if they are finally part of the approved rule.

The tenant may request the 50% reduction before January 31 during the state of alarm, its possible extensions and up to four months later. To access this help, the premises must be owned by a large owner and there must not be a prior agreement between the parties for the temporary reduction of rent or a moratorium on payment during the pandemic.

The text includes tax incentives for those who are not large holders and reduce the income they obtain from the rental of their premises dedicated to hospitality and commerce.

That is, if an owner who asks for 1,000 euros decides to reduce the rent to 400, he will be able to deduct 600 euros in personal income tax. If you forgive the rent, 1,000 euros will be deducted. “This measure will produce a saving of 324 million euros in savings for the sector”, assured Montero.

ICO Credits

On the other hand, the Government has approved the extension of one year in the absence of loans guaranteed by the ICO lines and by the reciprocal guarantee companies of the Autonomous Communities with reguarantee of CERSA, as well as three years of their amortization period until a maximum of eight years.

This decree includes the creation of a new section of the ICO guarantee line approved in Royal Decree-Law 25/2020, for SMEs and freelancers in the tourism, hospitality and related activities endowed with 500 million euros and with up to 90% guarantee.

This line will allow companies highly affected by Covid-19 to obtain financing, such as travel agencies, discretionary transport and the accommodation sector, by increasing the public guarantee of guarantees by 10 points compared to the ICO COVID-19 line.

In addition, within this financing block, the creation of a Reciprocal Guarantee Company of an exclusively tourist nature is proposed, the purpose of which is to facilitate access to financing through guarantees. Its capacity to inject liquidity is 700% of its capital.

tax debts

On the other hand, a new 6-month postponement is approved of tax debts corresponding to declarations-assessments and self-assessments whose filing and payment deadline ends from April 1 to April 30, 2021, both inclusive.

Thus, the reduction of the net yield in objective estimation (IRPF) and the simplified regime fee (VAT) of 35% is approved for the fourth installment payment of 2020 and for the first payment of 2021. In addition, other measures are approved to alleviate the tax burden of companies and freelancers.

On the other hand, the exemptions of RDL 30/2020 of social measures in defense of employment are extended to sectors that become hyper-protected: wholesale trade of beverages, restaurants and food stalls, drinking establishments.

Companies in these sectors will be exempt from paying part of the social contributions accrued in December 2020 and January 2021. They will have an 85% reduction in their social contributions if the company has less than 50 workers and 75% if they have 50 or more, as indicated by the minister.

Regarding the regulatory measures, the requirements for the maintenance of regional incentives are made more flexible, the moratorium to present bankruptcy proceedings is extended and a transitory regime is established for the areas of great tourist influx for 2021.