The BOE of 28 December published Royal Decree-Law 20/2022, of 27 December, on measures to respond to the economic and social consequences of the war in Ukraine and to support the reconstruction of the island of La Palma and other situations of vulnerability, which came into force on the same day of its publication.
This Royal Decree-Law gives continuity to the National Response Plan to the Russian War in Ukraine approved by the Government last March, extended and expanded with subsequent regulations, to reduce inflation and adapt the Spanish economy to the new economic environment, while reinforcing a safety net for vulnerable groups and the most affected sectors.
In the fiscal area, several measures have been adopted, most notably the abolition of VAT on fresh products that were already at a reduced rate and the reduction in the tax rate on oil and pasta.
The main tax measures adopted in the aforementioned RDL 20/2022 are set out below:
I. Energy taxation measures
VALUE ADDED TAX
The reduction in the VAT rate on supplies of natural gas, pellets, briquettes and firewood is maintained.
Article 1 of RDL 20/2022 sets the VAT rate on deliveries, imports and intra-Community acquisitions of natural gas, briquettes and pellets from biomass and wood for firewood at 5%, effective from 1 January 2023 and valid until 31 December 2023. As will be recalled, Royal Decree-Law 17/2022, of 20 September, already established, with effect from 1 October 2022 and valid until 31 December 2022, this same tax rate for these same supplies.
It is also established that, with effect from 1 January 2023 and valid until 31 December 2023, the rate of the equivalence surcharge applicable to supplies of briquettes and pellets from biomass and wood for firewood will be 0.625 percent.
The reduction in the VAT rate on electrical energy is maintained.
Article 3 of RDL 20/2022 amends article 18 of Royal Decree-Law 11/2022, of 25 June, to extend until 31 December 2023 the VAT rate of 5 per cent on deliveries, imports and intra-Community acquisitions of electrical energy made to:
- Holders of electricity supply contracts, whose contracted power (fixed power term) is less than or equal to 10 kW, regardless of the voltage level of the supply and the type of contract, provided that the arithmetic average price of the daily market corresponding to the last calendar month prior to the last day of the billing period has exceeded 45 €/MWh.
- Holders of electricity supply contracts who are recipients of the bono social de electricidad and are recognised as severely vulnerable or severely vulnerable at risk of social exclusion in accordance with the provisions of Royal Decree 897/2017, of 6 October.
The reduction of the VAT rate on disposable surgical masks is maintained.
Article 2 of RDL 20/2022 amends, with effect from 1 January 2023, the first additional provision of Royal Decree-Law 29/2021, of 21 December, to extend until 30 June 2023 the application of the 4 per cent VAT rate to supplies, imports and intra-Community acquisitions of the disposable surgical masks referred to in the Agreement of the Interministerial Medicines Prices Commission, 12 November 2020, provided for in Article 7 of Royal Decree-Law 29/2021, of 17 November.
The reduction in the VAT rate for certain goods and services necessary to combat the effects of SARS-CoV-2 is maintained.
Article 2 of RDL 20/2022 amends, with effect from 1 January 2023, the first additional provision of Royal Decree-Law 29/2021 of 21 December to extend until 30 June 2023 the application of the 0 per cent VAT rate to supplies, imports and intra-Community acquisitions of certain goods and services necessary to combat the effects of SARS-CoV-2, imports and intra-Community acquisitions of certain goods and services necessary to combat the effects of SARS-CoV-2, as well as for the purposes of the special equivalence surcharge scheme, provided for in the seventh final provision of Royal Decree-Law 35/2020 of 22 December.
SPECIAL TAX ON ELECTRICITY
The reduction in the rate of excise tax on electricity is maintained.
Article 2 of RDL 20/2022 amends, with effect from 1 January 2023, the first additional provision of Royal Decree-Law 29/2021, of 21 December, to extend the application of the 0.5% tax rate until 30 December 2023.
TAX ON THE VALUE OF ELECTRICITY PRODUCTION
The temporary suspension of the tax is maintained for 2023.
Article 5 of RDL 20/2022 maintains the temporary suspension of the tax on the value of electricity production (IVPEE) for 2023.
II. Tax measures to stimulate activity and maintain economic and social stability
VALUE ADDED TAX
Reduction in the VAT rate on olive and seed oils and pasta products
With effect from 1 January 2023 and valid until 30 June 2023, the VAT rate on the supply, import and intra-Community acquisition of the following products is reduced to 5%:
- Olive and seed oils.
- Pasta products.
The rate of the equivalence surcharge applicable to these transactions will be 0.625%.
As of 1 May 2023, the applicable tax rate will be 10 per cent if the year-on-year rate of underlying inflation for the month of March, published in April, is less than 5.5 per cent. In this case, the rate of the equivalence surcharge applicable to these transactions will be 1.4 per cent.
Abolition of VAT on certain fresh products
With effect from 1 January 2023 and valid until 30 June 2023, the VAT rate on deliveries, imports and intra-Community acquisitions of the following products is reduced to 0 percent:
- Common bread, as well as frozen common bread dough and frozen common bread intended exclusively for the production of common bread.
- Bread-making flour.
- The following types of milk produced by any animal species: natural, certified, pasteurised, concentrated, skimmed, sterilised, UHT, evaporated and powdered.
- Cheese.
- Eggs.
- Fruits, vegetables, legumes, tubers and cereals, which have the status of natural products in accordance with the Food Code and the provisions issued for its development.
The rate of the equivalence surcharge applicable to these transactions will be 0 per cent.
However, the applicable tax rate will be 4 per cent as of 1 May 2023, in the event that the year-on-year rate of underlying inflation for the month of March, published in April, is less than 5.5 per cent. In this case, the rate of the equivalence surcharge applicable to these transactions shall be 0.5%.
PERSONAL INCOME TAX
Deduction for maternity
With effect from 1 January 2023, a transitory provision, the thirty-seventh, is added to the Personal Income Tax Act to clarify the right to continue receiving the deduction for maternity in Personal Income Tax from 1 January 2023, even when one of the parents is entitled to the child support supplement for the same child, thus preventing the regulatory change carried out in this area from harming the families that until now have been benefiting from this deduction.
III. Support measures to repair the damage and for the economic and social reconstruction of the island of La Palma
PROPERTY TAX AND BUSINESS TAX
The tax benefits established for IBI and IAE are extended.
The tax benefits established for IBI and IAE by Article 25 of Royal Decree-Law 20/2021, of 5 October (exemption from IBI quotas affecting homes, industrial, tourist, commercial, maritime-fishing and professional establishments, agricultural and forestry holdings, work and similar premises, damaged and reductions in IAE for industries of any nature, damaged commercial, maritime-fishing, tourist and professional establishments, legally authorised surcharges on the same, and the possibility of refunding amounts paid if the corresponding bill has been paid).
TAX BENEFITS: IBI, IAE, IRPF…
Tax benefits are approved as a consequence of the forest fires that occurred during the months of June, July and August 2022:
As is customary when natural disasters occur (forest fires, in this case that took place in the Autonomous Communities of Andalusia, Aragon, Balearic Islands, Canary Islands, Castile and Leon, Castile-La Mancha, Catalonia, Valencia, Extremadura, Galicia, Madrid, Murcia, Navarre, Basque Country and La Rioja, during the months of June, July and August, and which are listed in the Annex to the Agreement of the Council of Ministers of 23 August 2022), the Government approves a series of exceptional measures that contribute to the restoration of normality in the affected areas, establishing in this case exemptions in the IBI quota, reductions in the IAE quota and special reductions for agricultural activities and exemptions for aid for personal damages in the IRPF.
OTHER MEASURES
Aid for families: cheque for 200 euros
A grant of 200 euros is established for families with incomes of up to 27,000 euros to reduce situations of economic vulnerability that are not covered by other social benefits.
This aid, of 200 euros in a single payment, is aimed at those who have been salaried, self-employed or unemployed in 2022, in order to alleviate situations of economic vulnerability not covered by other social benefits, such as pensions or the minimum living income. In order to receive this aid, maximum income and joint assets are also established according to the number of people living together at home, with the aim of ensuring that the group of beneficiaries of the aid responds to the principles of need and progressivity.
Commercial/bankruptcy measures
An “accounting” moratorium is again introduced in order to avoid the liquidation of companies which, under normal conditions, may be viable. Therefore, the exceptional measure provided for in Article 13 of Law 3/2020 of 18 September is extended and, consequently, for the purposes of the legal grounds for dissolution due to losses, losses for the financial years 2020 and 2021 will not be computed for a period of 3 accounting years; i.e. losses for the financial years 2020 and 2021 will not be computed either in the accounting years 2022 and 2023 or until the close of the financial year 2024. In the event that, taking into account only the results of the 2022, 2023 or 2024 financial years, losses result that reduce the net assets to less than half of the share capital, the legal grounds for dissolution due to losses shall be deemed to have arisen, and the management bodies shall act in accordance with the terms of article 363.1.e) of the Consolidated Text of the Capital Companies Act, approved by Royal Legislative Decree 1/2020, of 2 July.
Housing measures: limitation of rental prices and suspension of evictions
- It is established to extend until 31 December 2023 the extraordinary limitation on the annual updating of the rent of housing rental contracts, regulated in article 18 of Law 29/1994, of 24 November, on Urban Leases, so that, in the absence of agreement between the parties, the updating of the rent cannot exceed the result of applying the annual variation of the Competitiveness Guarantee Index.
- The suspension of proceedings and evictions in the cases and in accordance with the procedures already established is extended until 30 June 2023, as well as the possibility, until 31 July 2023, of requesting compensation from the landlord or owner, a measure already included in Royal Decree-Law 37/2020, of 22 December, on urgent measures to address situations of social and economic vulnerability in the field of housing and transport.
- Finally, an extraordinary extension of the term of rental contracts for six months from the date of termination is envisaged, during which the terms and conditions established for the contract in force will continue to apply.
Deferral of payment of Social Security contributions
it is considered appropriate to extend, also for a further three months, the extraordinary system of deferrals of payment of Social Security contributions referred to in Article 2 of Royal Decree-Law 4/2022 of 15 March adopting urgent measures to support the agricultural sector due to drought, Article 37 of Royal Decree-Law 6/2022, of 29 March adopting urgent measures in the framework of the National Plan of response to the economic and social consequences of the war in Ukraine, and Article 28 of Royal Decree-Law 6/2022 of 29 March adopting urgent measures in the framework of the National Plan of response to the economic and social consequences of the war in Ukraine.
Measures relating to the minimum living income: 15% increase.
With effect from 1 January 2023, the extraordinary increase in the minimum living income benefit established in article 45 of Royal Decree-Law 11/2022 of 25 June is extended for the whole year, for which purpose the percentage to be applied to that benefit for its updating in accordance with the provisions of the General State Budget Act for 2023 is supplemented by a percentage equal to the difference between that percentage and 15%, so that the minimum subsistence income is increased by 15% for 2023 with respect to the amount it had on 1 January 2022.
Measures for those affected by the eruption of the La Palma volcano
Specifically, the moratorium on mortgage and non-mortgage loans is maintained for those affected who have requested it, limited to six months.
The Temporary Employment Regulation Files (Expedientes de Regulación Temporal de Empleo, ERTEs) arising from the force majeure situations caused by the eruption of the volcano are extended until 30 June, and not only the owners but also the owners of the usufruct of the dwelling are included as possible beneficiaries of aid for material damage to the habitual residence.
In turn, the unemployment benefit for self-employed workers is extended until June 2023.
Extraordinary offer of public employment
In addition and complementary to the offer of public employment corresponding to the year 2022, an extraordinary offer of 1,000 vacancies is approved. The implementation of this extraordinary public employment offer must be carried out within a non-extendable period of one year from the publication of the respective calls for applications.
Other urgent measures
- The revised text of the General Social Security Act is amended to allow retired professionals to work and thus contribute to alleviating the shortage of primary care doctors, family doctors and paediatricians in the National Health System.
- The validity of Royal Decree 152/2022 of 22 February, which sets the minimum interprofessional wage for 2022, is extended. Therefore, the minimum wage for 2022 is extended to 2023, until an agreement is reached regarding its increase.
- This Royal Decree-Law adapts to the new period of public support that extends until 30 June 2023 the measures in the labour field to support workers in article 44 of Royal Decree-Law 6/2022, of 29 March, adopting urgent measures within the framework of the National Plan of response to the economic and social consequences of the war in Ukraine, as well as in article 1. Diez del Real Decreto-ley 11/2022, de 25 de junio, por el que se adoptan y se prorrogan determinadas medidas para responder a las consecuencias económicas y sociales de la guerra en Ucrania, para hacer frente a situaciones de vulnerabilidad social y económica, y para la recuperación económica y social de la isla de La Palma, de forma que:
- Companies benefiting from direct aid will not be able to justify objective redundancies based on increased energy costs.
- Companies that avail themselves of the measures to reduce working hours or suspend contracts regulated in article 47 of the Workers’ Statute for reasons related to the invasion of Ukraine and that benefit from public support will not be able to use these reasons to make redundancies.
You can contact our office for any questions or clarification you may have in this regard.
