COVID- 19: Is the extension of deadlines for filing returns other than for VAT or corporate income tax restricted for small and medium-sized companies included in tax groups?
Spain Tax Commentary
On April 15, 2020, the Official State Gazette -BOE- published Royal Decree-Law 14/2020, of April 14, 2020, extending the filing and payment deadline for certain tax returns and self-assessments (see our alert). This extension benefits taxpayers that had revenues not higher than €600,000 in 2019 and relates to returns to be filed between April 15 and May 20 2020.
However, expressly excluded from this option are:
a) Tax groups for corporate income tax purposes, no matter what net revenue figures they had.
b) Groups of companies taxed under the special VAT grouping scheme, no matter what revenues they had.
The wording of the article creates doubts over whether entities with revenues not higher than €600,000, which are part of a VAT group or a group for corporate income tax purposes, may extend the filing and payment deadlines for returns and self-assessments relating to other taxes. This happens, for example, in relation to withholding tax returns, which are filed by every entity individually, despite belonging to a tax group; or, even, to entities with revenues not higher than €600,000 that belong to a group for corporate income tax purposes, in relation to their VAT returns.
From a literal interpretation of the article, it might be thought, that groups are mentioned in absolute terms, meaning that the scope of that exception prevents the members of a tax group from extending the deadlines for all their tax returns.
In VAT groups and groups for corporate income tax purposes, however, it is the group (represented by their parent company) that has to fulfill the group’s tax obligations with the Spanish public finance authority (article 163 nonies of VAT Law 37/1992, of December 28, 1992, and article 56 of Corporate Income Tax Law 27/2014, of November 27, 2014); whereas, for other taxes, every individual entity has taxpayer or taxable person status and, as such, is required to fulfill procedural and substantive obligations. This, combined with what, in our view, is the purpose of the article, should allow it to be concluded that the only returns excluded from the extension of deadlines are those related to tax group regimes for VAT and corporate income tax purposes (forms 322, 353 and 222), not the other returns that are filed individually.