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We will now detail the main characteristics of this aid program, which is intended for self-employed individuals and companies in certain sectors that have been particularly affected by the economic crisis caused by Covid (see sectors).

1. Aim:

• To settle the debt and make payments to suppliers and other creditors. First, payments to suppliers will be made in order of seniority, and if applicable, the principal of the bank debt will be reduced, prioritizing the reduction of the principal of debt with public guarantees.
• Cover fixed costs: salaries, self-employment contributions, leases, supplies, power upgrades, etc.

2. Endowment:

• The first allocation of 5 billion euros for all the Autonomous Communities and the Cities of Ceuta and Melilla, with the exception of the Balearic and Canary Islands.
• The second allocation of 2billion will be assigned to the Balearic and Canary Islands communities.

3. Request based on transaction volume:

• In the case of entrepreneurs, professionals or entities whose volume of operations in 2020 was less than or equal to 10 million euros and do not apply the group regime in the Corporate Tax, they may only participate in the call made by the Autonomous Community or, where applicable, the Cities of Ceuta and Melilla, in which their tax domicile is located.

• Groups and entrepreneurs, professionals or entities whose volume of operations in 2020 was greater than 10 million euros and who carry out their economic activity in more than one autonomous territory or in more than one Autonomous City, may participate in the calls made in all the territories in which they operate.

4. Requirements

• Registered office in Spanish territory or, in the case of non-resident non-financial entities, operating in Spain through a permanent establishment. Under no circumstances may the tax domicile be in a tax haven.
• Accrual between March 1, 2020 and May 31, 2021 of debt obligations and payments to suppliers, financial and non-financial creditors, as well as fixed costs incurred, arising from contracts prior to March 13, 2021.
• Maintenance of the activity until June 30, 2022
• Do not distribute dividends or increase senior management compensation for two years
• Not to be ceased from activity at the time of application
• not have filed for bankruptcy.
• cannot be involved in bankruptcy proceedings (unless they are in the process of fulfilling an agreement)
• Not disqualified in bankruptcy proceedings (unless the disqualification period has ended).
• cannot have been declared insolvent in any proceedings
• not be subject to judicial intervention
• Not having been convicted by final judgment to the penalty of loss of the possibility of obtaining subsidies or public aid or for crimes of prevarication, bribery, embezzlement of public funds, influence peddling, fraud and illegal exactions or urban planning crimes.
• Not having given rise, for a cause for which he/she had been declared guilty, to the final termination of any contract entered into with the Administration
• Be up to date with tax and social security payments
• A drop in annual transaction volume in 2020 of at least 30% compared to 2019 for those entrepreneurs or professionals (direct and objective estimation) and entities attached to the sectors already referred to and defined in Annex I of this Royal Decree-Law 5/2021

In the case of consolidated groups that pay Corporate Income Tax under the consolidated taxation regime: the volume of operations to be considered to determine the fall in activity will be the result of adding up all the volumes of operations of the entities that make up the group.

• They are not considered recipients:
• Business owners or professionals, entities and consolidated groups that in the Personal Income Tax return for 2019 have declared a negative net result for the economic activities in which they have applied the direct estimation method for its determination.
• Negative taxable base of Corporate Income Tax or Non-Resident Income Tax, before the application of the capitalization reserve and compensation of negative taxable bases.

5. Amount to be received

The Autonomous Communities will establish the criteria for aid per recipient, so that the following maximum limits:

• 3,000 euros when dealing with entrepreneurs or professionals who apply the objective estimation.
• For those entrepreneurs and professionals under the direct estimation method whose volume of operations has fallen by more than 30% in 2020 compared to 2019, the maximum aid that will be granted will be:

a) 40% of the drop in the volume of operations in 2020 compared to 2019 that exceeds said 30% for companies with a maximum of 10 employees.

b) 20% of the amount of the drop in the volume of operations in 2020 compared to 2019 that exceeds said 30%, in the case of companies that have more than 10 employees

• The aid cannot be less than 4,000 euros or more than 200,000 euros.

6. Deadlines

These funds will take at least a month and a half to arrive. The government has "self-imposed" a deadline of one month and ten days to formalize the official distribution order, and from then on, it will depend on how quickly the autonomous communities channel them.

Everything seems to indicate that the communities could begin distribution in May.

NOTE: No direct aid may be granted after December 31, 2021.

We remain at your disposal for any questions or queries you may have.

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Sonia Fernández Álvarez

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