Teleworking for another two months

In a cabinet meeting on Tuesday the Spanish government approved a new relief package with over thirty employment and welfare measures to mitigate the coronavirus crisis. These are the main steps taken:

Employment

Teleworking stays, more jobless workers to receive unemployment benefit

One of the decisions that affects the largest number of people is a two-month extension of the “preferential nature” of teleworking and shorter working hours for employees who need to look after underage children or other dependants. Nadia Calviño, Spain’s Minister of Economy, remarked that “teleworking is one of the main lessons we have learnt from this crisis”. Furthermore, staff who were laid off during their trial period after 9 March plus anyone who changed jobs after 1 March and then lost their new position due to the COVID-19 emergency will be entitled to unemployment benefit. Likewise, any workers on a permanent but seasonal contract who have not been able to get back to work will also be allowed to sign on, even if they do not meet the criteria to receive unemployment benefit. This is particularly important for the tourism and catering industry, whose staff were expected to go back to work ahead of the Easter holiday. Calviño stated that “this will allow workers who had been excluded from earlier government decrees to apply for benefit”. Finally, businesses in the so-called essential sectors whose revenue has dropped are now allowed to furlough staff on account of the coronavirus crisis.

Lending to businesses

Rental deposits on business premises may be used to cover rent

Rent is one of the main expenses that businesses and self-employed workers must cover. The Spanish government has announced that rent payments may be frozen for up to four months when the landlord is a company, a public housing body or a major real estate holder. This deferment will be applied automatically. However, if the landlord is an individual person or a small holder, tenants will be allowed to use their deposit towards rent payments, provided they settle the outstanding amount within one year. They may also ask for “a one-off, temporary” postponement of the payment.

Furthermore, the Spanish government has agreed to allow Spain’s public bank, the Instituto de Crédito Oficial (ICO) to secure not merely bank loans but also fixed-rate promissory notes issued by the AIAF (Spain’s benchmark market for Corporate Debt and Private Fixed Income) and the MARF, Spain’s Alternative Fixed-Income Market. This might help companies to sell their short-term bonds.

Tax breaks and other measures

To make €1.1bn available to companies

While the state of emergency remains in place in Spain, self-employed workers whose method of taxation is not linked to their quarterly revenue will be allowed to switch to a system based on actual income, which will allow taxation “to be commensurate with their real income”. In addition, companies will be allowed to lower their quarterly income and VAT payments by discounting the number of days that the state of emergency has remained in place. Firms will also be allowed to delay payment of outstanding debts with the tax office until they are granted an ICO loan. However, employers will be expected to settle their debt as soon as they receive the cash.

Finally, any sale of medical goods to public bodies, such as hospitals, will now be VAT-exempt. The value added tax on electronic publications (e-books, digital magazines and newspapers) has been cut down from 21 to 4 per cent.

Research parks and sport

To benefit from aid packages for specific sectors

In the field of sport, a foundation will be set up with funds from the sales of football tv rights with the aim of supporting federated sport financially. Loan payments will be deferred for research and technology parks so they don’t run out of steam.

Besides detailing the government’s new measures, spokesperson María Jesús Montero announced that PM Pedro Sánchez has called a meeting of the committee for social dialogue on Thursday at 11am in order to involve social agents in the reconstruction accord that will be discussed within a new parliamentary committee in the Spanish lower chamber.