Spain - Covid 19 Response Search

Fiscal Measures

1. Spending Measures (Budget Allocations)

  • The Minister for Social Rights announced they will implement a monthly Minimum Income for Living (Ingreso Mínimo Vital) of €462 and a maximum of €1,015 per family, for vulnerable families (measure expected for the end of May 2020, as of 18 May not yet implemented).

2. Tax Measures (Deferral of Payroll Tax Obligations, Extensions of Tax Filing Deadlines)

  • Deferral of tax payment obligations without security for self-employed and SME (turnover under €6,010,000) with a limit of €30,000. This applies to payroll tax withheld, VAT payments or instalment payments of Company Tax. 3 first months with no interest, up to 4 months.
  • No foreclosure measures on real estate that secures tax obligations until April 30.
  • 2019 Annual Report filing obligations: the term to comply with this obligation will start running in the date the state of alarm ceases (not yet determined). Since then, companies will have (i) 3 months for the administrators to sign the annual report, (ii) 3 more months for owners to approve the annual report and (iii) 1 more month to deposit the annual report in the Company Registry.
  • Term suspensions and suspension of administrative proceedings (this does not affect the filing of tax statements or self-assessment taxes).

3. Subsidies to Preserve Jobs, Employee Benefits, Food Assistance

  • Creation of a new fast procedure for collective temporary redundancy/reduction of working hours due to force majeure. No negotiation with the labour representatives is needed and the Administration needs to respond in 5 days (if not, it is considered approved). The duration of these collective measures is temporary and they will only last during the state of emergency. Subject to review by the Labour Authority to avoid fraud or lack of proportionality.
  • Exoneration of 100% of the company’s contribution to the social security with companies with less than 50 workers when the company applies a collective procedure due to force majeure (75% if more than 50. In these cases, companies will have the obligation to maintain the number of workers for 6 months once the activity restarts. Exceptionally, this requirement does not apply if risk of insolvency.
  • Faster and more flexible procedure for temporary collective dismissal due to economic, productive, technical organizational reasons.
  • Prohibition of dismissals due to force majeure or economic, productive, technical organizational reasons linked directly or indirectly to COVID-19.
  • Tele-commuting as preferred way of work.
  • Paid recoverable leave for workers. Workers will need to recover the hours through extra hours until the end of 2020.

4. Public Loan Guarantees and Expansion of Loans to Businesses

  • Guarantee of Ministry of Economic Affairs of a maximum of €100,000 million to cover loans to businesses. So far: (i) 24 March: a first tranche of €20,000 million was created: a €10,000 million sub-tranche for SME and self-employed and another €10,0000 sub-tranche for other companies The guarantee covers up to 80% for SME or self-employed, 70% for new financial instruments of non-SME and 60% for renovation of existing financial instruments. Guarantees will have a maximum term of 5 years (ii) 10 April: a second tranche of €20,000 million was created for SME and self-employed with the same conditions of the first tranche (iii) 5 May: a third tranch of €20,000 for self-employed, SMEs and other companies, €4,000 million to cover IOUs of the Mercado Alternativo de Renta Fija and €500 million reinforce guarantees of the Compañía Española de Reafianzamiento.

5. Student Loan Relief


6. Insolvency Law Relief

  • Suspension of the duty to file for insolvency during the state of alarm and until 31 December 2020.
  • Creditors will not be able to force insolvency proceedings of their debtors until 31 December 2020 (they can file a forced-insolvency petition, but the Court will not process it until 31 December 2020 and the debtor can file for its voluntary petition prior to that and avoid a forced-proceeding with its implications: i.e. remaining in possession).
  • Possibility to negotiate to modify or reach a new Court-approved refinancing agreement (“homologación”) until 14 March 2021, even if a year has not elapsed since the previous refinancing agreement.
  • Suspension of the obligation to file for liquidation if breach of obligations under a Court-approved arrangement with creditors until 14 March 2021.
  • Incentives to fresh money: (i) money cashed in the company within the frame of an arrangement with creditors or a rearrangement will be considered as a post petition claim, even if it comes from specially related persons; (ii) money cashed in by specially related persons between 14 March 2020 and March 14 2022 will be considered as ordinary claims (instead of subordinated).
  • Several measures taken in order to make the formal insolvency proceedings more agile.
  • Companies with temporary redundancy schemes (that have an obligation to maintain the number of workers) are exceptionally allowed to dismiss workers if they are under a risk of insolvency proceedings.
  • The Spanish Insolvency Act Recast approval process was sped-up after its approval and its publication in the Spanish Official Gazette (May 7 2020), it will enter into force in 1 September 2020.
Monetary & Macro Financial Measures

1. Reduction of Interest Rates

No, the European Central Bank announced it will maintain the interest rates.

2. Expansion of Central Bank’s Holdings of Government Bonds


3. Other Measures to Support Flow of Credit


4. Suspension of Foreclosures/Evictions

  • Suspension of foreclosure procedures or evictions for individuals/families under a situation of special vulnerability for a maximum of 6 months after the state of emergency is ended.

5. Reductions/Suspensions of Mortgage Payments

  • Suspension of mortgage payments for individuals under a situation of special vulnerability.
  • No measures for businesses yet.

6. Asset Purchases (Liquidity Facilities, Purchase of Private and Public Sector Securities, Acquiring Equity of Larger Affected Companies)

  • Foreign investments of more than 10% in Spanish companies need an administrative authorization if they are related to sectors that affect public policy, public safety and public health (critical infrastructures, even if they are virtual, critical technology, essential supplies, sectors with access to sensitive data, media).

7. Exchange Rate Adjustments

  • Decided at a European level.
Health Policy Responses

1. Social Distancing

  • Compulsory since the declaration of the state of emergency (March 14).
  • For any permitted activities, distance of 1 meter.
  • The Government announced that masks in public will become compulsory (as of 21 May) in places where the social distancing cannot be guaranteed.

2. Closure of Public Places for Gathering

  • The declaration of the state of emergency (March 14) entailed a prohibition to use public spaces except to acquire food/first need products/medicines, etc., to go to hospitals/healthcare centers/centers for the care of the elder or dependent persons, to go to work and go back home, to go to banks, to fill the tank in a gas station, in case of force majeure or situation of need or any analogous activity, which can be done individually.
  • Closure of museums, archives, libraries, monuments, live shows, sports events, etc.
  • Prohibition of traditional festivals or celebrations.
  • Cults, civil or religious ceremonies: distance of 1 meter and avoid overcrowding. Nevertheless most churches have closed.

3. Closure of Non-Essential Businesses

  • The declaration of the state of emergency in Spain (March 14) entailed a prohibition of any commercial activity.
  • In commercial premises/retail outlets except for food, animal food, drinks, first need products, pharmacies, doctors, opticians, orthopedics, hygiene products, newspapers, gas stations, tobacco shops, technology and telecommunications, internet/phone/on-line commerce, dry cleaners.
  • Prohibition of restaurant activity except of home delivery.

Since May 11, lockdown release plan (“desescalada”), with 4 different phases, applied at a local level depending on health parameters considered by the experts of the Government.

  • Explanation of phases 0, 1, 2 and 3 towards what has been called the “new normality”.

    Phase 0: Preparations

    • Walks allowed with different timetables per range of age.
    • Individual attention in commerce and services: previous appointment (relieved under phase 0.5), 1 client per worker.
    • Restaurants/Cafes: take away or pick-up.
    • Construction works in buildings: allowed in commercial property or inhabited properties, if it does not put residents at risk.

    Phase 1: Initial

    • Social gatherings of up to 10 people allowed (both indoors and outdoors), social distance of 2 meters.
    • Small commerce and services: opening allowed with restrictions.
    • Restaurants/Cafes: up to 50% of the outdoors tables.
    • Leisure: up to 30 people (indoors) or 200 (outdoors). Opening of museums and libraries with restrictions.
    • Religious cult: 1/3 of its maximum capacity allowed.
    • Construction works in buildings: allowed in commercial property or inhabited properties, if it does not put residents at risk.
    • Agriculture/fishing: allowed.

    Phase 2: Intermediate

    • Trips to second residence allowed within the same province. Weddings allowed with a limited number of guests.
    • Commerce and services: opening of malls allowed (communal areas closed.
    • Restaurants/Cafes: up to 30% of the indoors tables; separation between tables.
    • Leisure: Cinemas, theatres or auditoriums up to 1/3 of the maximum capacity and previously booked tickets, cultural activities of up to 40 people (indoors) or 400 (outdoors).
    • Religious cult: 1/2 of its maximum capacity allowed.
    • Hotels: communal areas with limitation of 1/3 of its maximum capacity.
    • Education: opening of schools for children under 6 years old if both parents work.

    Phase 3: Advanced

    • Social contact allowed if no vulnerability or prior pathologies.
    • Commerce and services: opening of malls allowed (communal areas up to 50% of its capacity).
    • Restaurants/Cafes: up to 50% of the indoors tables; night bars and discotheques allowed up to 1/3 of its maximum capacity.
    • Leisure: Shows and cultural activities and theme parks with outdoor activities up to 800 people (seated).
    • Religious cult: 1/2 of its maximum capacity allowed.
    • Hotels: communal areas with limitation of 1/2 of its maximum capacity.

As of May 20:

    • Madrid, Castilla y León and Barcelona are still half way between phase 0 and phase 1 (in what has been called “phase 0.5”).
    • ○ The rest of Spain is under phase 1, except two islands in the Canary Islands (El Hierro y La Gomera).

4. School Closures

  • Some regions decided to close schools/universities/educational centers in the days before the state of emergency was declared (March 14).
  • The declaration of the state of emergency suspended any face-to-face educational activity in any public or private center until the end of the state of emergency. Distance/online learning is allowed and most schools and universities have adapted to online teaching methods.
Global Cooperation - International Assistance

Expected measures at a European Union level, yet to be determined.

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