The Royal Decree-Law 20/2022, of December 27, 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, was published in the Official State Gazette (BOE) on December 28, and came into force on the same day as its publication.
This Royal Decree-Law gives continuity to the National Plan for response 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 strengthening a safety net for vulnerable groups and the most affected sectors.
In the fiscal field, several measures are adopted, notably the elimination of VAT on fresh products that already had the reduced rate and the reduction of the tax rate on oil and pasta.
The following are the main tax measures adopted in the aforementioned Royal Decree-Law 20/2022:
I. Measures regarding energy taxation
VALUE ADDED TAX
The reduction in the VAT tax rate on supplies of natural gas, pellets, briquettes and firewood remains in place
Article 1 of Royal Decree-Law 20/2022 sets the VAT rate at 5 percent for deliveries, imports, and intra-Community acquisitions of natural gas, briquettes, and pellets derived from biomass and firewood, effective from January 1, 2023, and valid until December 31, 2023. As will be recalled, Royal Decree-Law 17/2022, of September 20, already established this same tax rate for these same supplies, effective from October 1, 2022, and valid until December 31, 2022.
It is also established that, with effect from 1 January 2023 and validity until 31 December 2023, the rate of the equivalence surcharge applicable to deliveries of briquettes and "pellets" from biomass and wood for firewood will be 0.625 percent.
The reduction in the VAT rate for electricity remains in place
Article 3 of Royal Decree-Law 20/2022 modifies Article 18 of Royal Decree-Law 11/2022, of June 25, to extend until December 31, 2023, the 5 percent VAT rate on supplies, imports and intra-community acquisitions of electricity made in favor of:
- Holders of electricity supply contracts, whose contracted power (fixed power term) is less than or equal to 10 kW, regardless of the supply voltage level and the contracting method, 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 receive the social electricity bonus and have been recognized as severely vulnerable or severely vulnerable at risk of social exclusion in accordance with the provisions of Royal Decree 897/2017, of October 6.
The reduction in the VAT rate for disposable surgical masks remains in place
Article 2 of Royal Decree-Law 20/2022 modifies, 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 percent VAT tax rate to deliveries, imports and intra-community acquisitions of disposable surgical masks referred to in the Agreement of the Interministerial Commission on Drug Prices, of 12 November 2020, provided for in Article 7 of Royal Decree-Law 34/2020, of 17 November.
The reduction in the VAT rate for certain goods and services necessary to combat the effects of SARS-CoV-2 remains in place
Article 2 of Royal Decree-Law 20/2022 modifies, 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 percent VAT tax rate to deliveries, 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 regime of the equivalence surcharge, provided for in the seventh final provision of Royal Decree-Law 35/2020, of 22 December.
SPECIAL TAX ON ELECTRICITY
The reduction in the tax rate of the Special Tax on Electricity remains in place
Article 2 of Royal Decree-Law 20/2022 modifies, with effect from 1 January 2023, the first additional provision of Royal Decree-Law 29/2021, of 21 December, to extend until 30 December 2023 the application of the tax rate of 0.5 percent.
TAX ON THE VALUE OF ELECTRIC POWER PRODUCTION
The temporary suspension of the tax remains in effect throughout 2023
Article 5 of Royal Decree-Law 20/2022 maintains the temporary suspension of the Tax on the Value of Electricity Production (IVPEE) for the year 2023.
II. Fiscal measures to boost activity and maintain economic and social stability
VALUE ADDED TAX
Reduction of the VAT tax rate on olive and seed oils and pasta
Effective from 1 January 2023 and valid until 30 June 2023, the VAT tax rate on deliveries, imports and intra-community acquisitions of the following products is reduced to 5 percent:
- Olive and seed oils.
- Pasta.
The equivalence surcharge rate applicable to these operations will be 0.625 percent.
From May 1, 2023, the applicable tax rate will be 10 percent if the year-on-year rate of core inflation for March, published in April, is less than 5.5 percent. In this case, the equivalence surcharge rate applicable to these transactions will be 1.4 percent.
Elimination of VAT on certain fresh products
Effective from 1 January 2023 and valid until 30 June 2023, the VAT tax 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 flours.
- The following types of milk produced by any animal species: natural, certified, pasteurized, concentrated, skimmed, sterilized, UHT, evaporated and powdered.
- The cheeses.
- The 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 equivalence surcharge rate applicable to these operations will be 0 percent.
However, the applicable tax rate will be 4 percent from May 1, 2023, provided that the year-on-year rate of core inflation for March, published in April, is less than 5.5 percent. In this case, the equivalence surcharge rate applicable to these transactions will be 0.5 percent
PERSONAL INCOME TAX
Maternity tax deduction
Effective from 1 January 2023, a transitional provision, the thirty-seventh, to the Personal Income Tax Law to clarify the right to continue receiving the maternity deduction in Personal Income Tax from 1 January 2023, even if one of the parents is entitled to the child support supplement with respect to the same child, thus preventing the regulatory change carried out in this matter from harming the families that have been enjoying it until now.
III. Support measures for the repair of damages and for the economic and social reconstruction of the island of La Palma
PROPERTY TAX AND TAX ON ECONOMIC ACTIVITIES
The tax benefits established in the IBI and the IAE are extended
The tax benefits established in the IBI and in the IAE by article 25 of Royal Decree-law 20/2021, of October 5, are extended for the year 2022 (exemption from the IBI fees that affect homes, industrial, tourist, commercial, maritime-fishing and professional establishments, agricultural and forestry operations, workplaces and similar, damaged and reductions in the IAE to industries of any nature, commercial, maritime-fishing, tourist and professional establishments damaged, legally authorized surcharges on the same, and possibility of refund of the amounts paid in the case of having paid the corresponding receipt).
TAX BENEFITS: IBI, IAE, IRPF…
Tax benefits are approved as a result 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 which took place in the Autonomous Communities of Andalusia, Aragon, Balearic Islands, Canary Islands, Castile and León, Castile-La Mancha, Catalonia, Valencian Community, Extremadura, Galicia, Madrid, Region of Murcia, Chartered Community of Navarre, Basque Country and La Rioja, during the months of June, July and August, and which are listed in the Annex of the Agreement of the Council of Ministers, of August 23, 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 fee, reductions in the IAE fee and special reductions for agricultural activities and exemptions for aid for personal damages in the IRPF.
OTHER MEASURES
Aid to families: a check for 200 euros
A grant of 200 euros is established for families with incomes up to 27,000 euros to reduce situations of economic vulnerability that are not covered by other social benefits.
This aid, a one-time payment of €200 , is intended for those who were employed, self-employed, or unemployed in 2022, to alleviate situations of economic vulnerability not covered by other social benefits, such as pensions or the minimum living income. To receive this aid, maximum income and combined asset limits are established based on cohabitation at the same address, ensuring that the beneficiaries meet the principles of need and progressiveness.
Commercial/bankruptcy measures
- An "accounting" moratorium is reintroduced to prevent the liquidation of companies that, under normal circumstances, could be viable. Therefore, the exceptional measure provided for in Article 13 of Law 3/2020, of September 18, is extended, and consequently, for the purposes of the legal grounds for dissolution due to losses, the losses of the 2020 and 2021 financial years will not be taken into account for a period of three accounting years. That is, the losses from the 2020 and 2021 financial years will not be taken into account in the 2022 and 2023 financial years, nor until the closing of the 2024 financial year. If, considering only the results of the 2022, 2023 or 2024 financial years, losses result that reduce the net worth to less than half of the share capital, the legal cause of dissolution due to losses will be considered to exist, and the administrative bodies must act in accordance with the provisions of Article 363.1.e) of the Consolidated Text of the Capital Companies Law, approved by Royal Legislative Decree 1/2020, of July 2.
Housing measures: rent price cap and suspension of evictions
- The extraordinary limitation on the annual update of the rent of housing lease contracts , regulated in article 18 of Law 29/1994, of November 24, on Urban Leases, is extended until December 31, 2023 , so that, in the absence of an agreement between the parties, the update of the rent cannot exceed the result of applying the annual variation of the Competitiveness Guarantee Index.
- The suspension of eviction proceedings and evictions in the cases and in accordance with the procedures already established is extended until June 30, 2023 , as well as the possibility, until July 31, 2023, of requesting compensation from the landlord or owner, a measure already included in Royal Decree-Law 37/2020, of December 22, on urgent measures to address situations of social and economic vulnerability in the area of housing and transport.
- Finally, an extraordinary extension of the term of the lease agreements of six months from the termination date is contemplated, during which the terms and conditions established for the current contract will continue to apply.
Deferral of Social Security payments
It is considered appropriate to extend, also for a period of three more months, the extraordinary scheme of deferrals in the payment of Social Security contributions referred to in article 2 of Royal Decree-Law 4/2022, of March 15, which adopts urgent measures to support the agricultural sector due to the drought, article 37 of Royal Decree-Law 6/2022, of March 29, which adopts urgent measures within the framework of the National Plan to respond to the economic and social consequences of the war in Ukraine, and article 28 of Royal Decree-Law 6/2022, of March 29, which adopts urgent measures within the framework of the National Plan to respond to the economic and social consequences of the war in Ukraine.
Measures relating to the minimum living income: 15% increase
It is decided to extend, with effect from 1 January 2023, for the whole year, the extraordinary increase of the minimum living income benefit established in article 45 of Royal Decree-Law 11/2022, of 25 June, for which purpose the percentage that must be applied to said benefit for its update in accordance with the provisions of the General State Budget Law for 2023 is supplemented by a percentage equal to the difference between that and 15%, so that the minimum living income experiences for 2023 an increase of 15% 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 for those affected who had requested it, limited to six months.
Temporary Employment Regulation Files (ERTEs) derived from situations of force majeure caused by the eruption of the volcano are extended until June 30, and the owners but also the holders of the usufruct over the home are included as possible beneficiaries of the aid for material damages in the usual housing.
The benefit for cessation of activity for self-employed workers is also extended until June 2023.
Extraordinary offer of public employment
In addition to and complementing the public employment offer for 2022, an extraordinary employment offer of 1,000 positions. This extraordinary public employment offer must be implemented within a non-extendable period of one year from the publication of the respective calls for applications.
Other urgent measures
- The consolidated text of the General Social Security Law is amended to allow retired professionals to work and thus help alleviate the shortage of primary care physicians, family doctors or pediatricians in the National Health System.
- The validity of Royal Decree 152/2022, of February 22, which sets the minimum interprofessional wage for 2022, is extended . Therefore, the 2022 minimum wage is extended to 2023, until an agreement is reached regarding its increase.
- This royal decree-law adapts to new period of public support extending until June 30, 2023 the measures in the workplace in support of workers under Article 44 of Royal Decree-Law 6/2022, of March 29, which adopts urgent measures within the framework of the National Plan to respond to the economic and social consequences of the war in Ukraine, as well as in Article 1.Ten of Royal Decree-Law 11/2022, of June 25, which adopts and extends certain measures to respond to the economic and social consequences of the war in Ukraine, to address situations of social and economic vulnerability, and for the economic and social recovery of the island of La Palma, so that:
- Companies receiving direct aid will not be able to justify objective dismissals based on increased energy costs.
- Companies that take advantage of the measures for reducing working hours or suspending contracts regulated in article 47 of the Workers' Statute for reasons related to the invasion of Ukraine and that benefit from public support may not use these reasons to carry out dismissals.
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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