– UPDATE 22 MARCH 2020: GOVERNMENT HAS PROPOSED THE EXTENSION OF THE LOCKDOWN FOR ANOTHER 15 DAYS –
Spanish government has published rapidly all kinds of new legislation and regulations concerning many different areas of business and private life during the ‘state of alarm’ or lockdown.
Please be aware that these rules, like all regulation over the past years, are drafted in the most ambiguous way. Nobody is reading and interpreting them in the same way, which creates legal insecurity. At this point I must admit that we are used to that in Spain, where there is always a struggle when interpreting law. Nothing on the legal territory seems to be straight forward.
With that in mind, I have tried and summarise for you these regulations as they get published. I have tried to bring it to you in laymen terms, and only the parts that could affect our clients, be it business of private clients.
It will not answer all your questions, but at least it will give you a general idea of your rights and obligations within this framework of new regulations due to the Corona Virus Pandemic.
In the following, you can click on the particular regulation to download the pdf file that holds a more detailed summary.
Summary: The tax incentives for the tourist industry or related business basically allows these businesses to postpone payment of taxes for 6 months. Although technically it also gives them a discount on social security contributions for employees, these benefits can only be obtained if the employee is kept on, which, in many cases, will not happen. If there is no work, why would you keep an employee on?
Summary: The ‘state of alarm’ or lockdown regulation limits during 15 days the freedom of movement and shuts down most commercial and retail activity which is not related to food, primary needs or health care. During the lockdown people can only be on public roads for the following activities, which must be carried out individually, except for accompanying disabled people or for different justified reasons:
a) Purchasing of food, pharmaceutical products and products of primary need;
b) Attendance to health centres, establishments or services;
c) Travel to work;
d) Return to home;
e) Attendance to elderly or underage people, persons with disability or people who are especially vulnerable;
f) Travel to bank or insurance company;
g) Because of force majeure o situation of need;
h) whatever activity of similar nature;
You may drive a vehicle on public roads for the purpose of previously said activities, or to refuel;
You must respect at any time the indications and recommendations of the health authorities.
Summary: Government made an announcement of support to all the businesses they have shut down. The way I see it, these benefits are described in 46 pages of meaningless regulation. It does not create benefits for new situations due to the Governments lockdown, but merely confirms already existing benefits for financially vulnerable people, for workers who cannot attend work because they need to attend family. There is a chapter that contains regulations for postponement of mortgage payments, but the conditions to apply for this postponement in most cases will not be met by businesses that have lost their income due to the Governments lockdown and it requires a lot of work and effort to proof if a business is affected by the Governments lockdown.
The only two true benefits I can see for some of our clients are that those who lose their income due to the Government lockdown can apply for an unemployment benefit which in most cases will be approx. 750 €. Of course, for that you will need to proof a drop in sales compared to previous months. As we all know, tourist industry is slow in winter, and was about to start. So to proof a drop of income will be difficult. The other benefit that might be useful is that you can apply to suspend the contracts of employees or reduce the working hours, provided you comply with the conditions.
Summary: This regulation basically orders the closure of all tourist accommodation and forces those accommodation with clients still present to close after their departure, or in maximum 7 days after 19 March 2020.
Roeland van Passel