Royal Decree-Law 2/2021, of 26th January, to reinforce and consolidate social measures in defense of employment.
The extension of aid to self-employed workers has been established until May 31st 2021. The new agreement includes:
- EXTRAORDINARY CLOSURE OF TRADE FOR THOSE SELF-EMPLOYED DUE TO TEMPORARY SUSPENSION OF ALL THEIR ACTIVITY AS A RESULT OF AN ORDER RELEASED BY THE COMPETENT AUTHORITIES INORDER TO CONTAIN THE COVID-19 PANDEMIC.
As of February 1st 2021, self-employed workers who are forced to suspend all their activities as a result of an order adopted by the competent authority to contain the spread of COVID-19, have the right to financial aid.
a) The requirements are:
• To be affiliated with and registered in the Special Regime of Social Security for Self-Employed, before January 1st 2021.
• Be up to date with the payment of social security contributions.
b) The amount of the benefit will be 50% of the minimum contribution base that corresponds to the activity carried out. However, when people united by family ties or similar live together in the same home, and two or more members are entitled to this extraordinary benefit then the amount of each of the benefits will be 40%.
c) The right to the benefit will be from the day following closure ordered by the competent authority. The receipt of the benefit will have a maximum duration of four months, ending the right to it on the last day of the month in which the lifting of the measures is agreed or at most until May 31st 2021.
d) During the time that the activity remains suspended, the social security registration will be maintained, leaving the self-employed worker exempt from the obligation to contribute, from the first day of the month in which the activity closure measure is adopted until the last day of the month following that in which said measure is lifted or until May 31st 2021, if this last date is earlier.
e) The benefit received is incompatible:
- with the receipt of working income as an employee, unless the income from that work is less than 1.25 times the amount of the minimum inter-professional salary; with the performance of another activity on their own.(1.187,50 euros)
- with the receipt of income from the company that has been closed.
- with the receipt of a Social Security benefit except for the one that the beneficiary has already been receiving if considered compatible with the performance of the activity being carried out.
*** Self-employed workers who as of January 31st 2021 had been receiving the extraordinary benefit because they were affected by a temporary suspension of activity, ordered by the competent authority, may continue to receive this benefit with the same requirements and conditions, during the time that the activity remains suspended and until the last day of the month following the lifting of said measure or until May 31st 2021.
2. EXTRAORDINARY BENEFIT FOR BUSINESS CLOSURE FOR THOSE WORKERS WHO DO NOT HAVE THE RIGHT TO THE ORDINARY BENEFIT OF BUSINESS CLOSURE COMPATIBLE WITH THE WORK OR THE ORDINARY BENEFIT REGULATED IN ARTICLE 327 OF THE SOCIAL SECURITY LEGISLATION.
As of January 27th 2021, the self-employed who do not have the right to the benefit for business closure compatible with their work, will be able to access an economic benefit for business closure of an extraordinary nature.
a) The requirements are:
• Be registered and up-to-date in the payment of contributions in the Special Scheme for Self-Employed Workers since before April 1st 2020.
• Not have the right to the benefit of business closure compatible with self-employment.
• Not have taxable net income from their self-employed activity in the first half of 2021 greater than € 6,650.
• Accredit in the first semester of 2021 taxable income from self-employment activity lower than that of the first quarter of 2020.
b) The amount of the benefit will be 50% of the minimum contribution base that corresponds to the activity carried out. However, when people united by family ties or similar unit live together in the same home, and two or more members are entitled to this extraordinary benefit of business closure, the amount of each of the benefits will be 40%.
c) It will begin to accrue with effect from February 1st 2021 and will have a maximum duration of 4 months, provided that the application is submitted within the first twenty-one calendar days of February. Otherwise, the effects are set on the first day of the month following the submission of the application and its duration may not exceed May 31st 2021.
d) The receipt of the benefit will be incompatible with the receipt of working income, unless the income from work for others is less than 1.25 times the amount of the minimum inter-professional salary; with the performance of another activity on their own; with the receipt of income from the company whose activity has been affected by the closure, as well as with the receipt of a Social Security benefit except for the one that the beneficiary has received because it is compatible with the performance of the activity that it develops.
e) During the period of receipt of the benefit, registration in the corresponding special regime will be maintained, leaving the self-employed worker exempt from the obligation to contribute i.e. the monthly social security contribution for self employed will be exempt.
f) As of 1st September 2021, all the provisional resolutions adopted will be reviewed. In the event that it appears that the interested party did not have the right to the benefit, the procedures for claiming the amounts unduly received will begin.
g) It may be cancelled voluntarily at any time before 30th April 2021, if it appears that the income received during the first semester of 2021 will exceed the established thresholds.
3. BENEFITS COMPATIBLE WITH SELF-EMPLOYMENT WORK.
Self-employed workers may request the benefit for business closure provided for in article 327 of the consolidated text of the General Social Security Law, approved by Royal Decree Law 8/2015, of October 30, provided that the requirements established in sections a), b), d) and e) of article 330.1 are adhered to. These are:
” a) Be affiliated and registered in the Special Scheme for Self-Employed or Self-Employed Workers or in the Special Scheme for Sea Workers, if applicable.
b) Have covered the minimum contribution period for cessation of activity referred to in article 338.
d) Not having reached the ordinary age to qualify for the contributory retirement pension, unless the self-employed worker did not have the required contribution period accredited.
e) Be up to date in the payment of Social Security contributions. However, if on the date of business closure this requirement is not met, the managing body will invite the self-employed worker to pay so that within the non-extendable period of thirty calendar days, he pays the debt.”
Additionally, access to this benefit will require proving a reduction in the taxable income (turnover/takings) from self-employment of more than 50% in the first semester of 2021 compared to the second semester of 2019; as well as not having obtained during the indicated semester of 2021 taxable computable net returns higher than € 7,980.
To calculate the reduction in income, the period of registration in the second half of 2019 will be taken into account and it will be compared with the proportional part of the income in the first half of 2021 in the same proportion.
In the case of self-employed workers who have one or more workers in their charge, compliance with all labor and Social Security obligations that they have assumed must be proven at the time of requesting the benefit. For this, they will issue a responsible declaration, which may be required by the mutual collaborators with Social Security or by the managing entity to provide the precise documents that prove this point.
3. This benefit may be received at most until May 31, 2021, provided that the worker has the right to it under the terms set forth in article 338 of the revised text of the General Social Security Law.
4. The recognition of the benefit will be carried out by the mutual collaborators or the Social Institute of the Navy on a provisional basis with effect from February 1, 2021 if requested within the first twenty-one calendar days of February, or with effect from the day after the request in another case.
5. As of 1st September 2021, the mutual collaborators with Social Security will collect from the Ministry of Finance the tax data for the years 2019 and 2021 necessary for the monitoring and control of the recognized benefits.
If the mutual collaborators with Social Security or the Social Institute of the Navy cannot have access to the data available in the tax administrations, the self-employed worker must provide the following the following within ten days of their request:
• Copy of form 303/420 of self-assessment of the Value Added Tax (VAT/IGIC), corresponding to the declarations of the third and fourth quarter of the years 2019 and 2021.
• Copy of model 130 corresponding to the self-assessment in installment payment of the Personal Income Tax (IRPF) for the third and fourth quarter of 2019 and the first and second quarter of 2021.
Self-employed workers who pay Personal Income Tax (IRPF) in the modular system (model 131) must provide the necessary documentation or any other means of proof that serves to prove the income required in this context.
6. Once the data has been verified by the collaborating entity or competent manager claims will be made to those self-employed workers who exceed the established income limits.
7. The self-employed worker, during the time that he is receiving the benefit, must also pay the General Treasury of the Social Security all the contributions not paid during that period.
The mutual collaborator or, where appropriate, the Social Institute of the Navy, will pay the self employed worker, the common contingencies of the social security together with the benefit payment.
8. In the event of definitive cessation of activity prior to May 31, 2021, the limits of the requirements set in this section will be taken in proportion to the duration of the activity.
9. The self-employed worker who has requested the payment of the benefit regulated in this article may:
• Give it up at any time before 30th April 2021, the resignation taking effect the month following its communication.
• Return on its own initiative the benefit received, without having to wait for the claim of the mutual collaborator with Social Security or the managing entity, when it considers that the income received during the first semester of the year 2021 or the fall of billing in the same period will exceed the established thresholds.
10. The benefit may be compatible with employment, in the following cases:
• Net income from self-employment and income from paid employment may not exceed 2.2 times the minimum inter-professional wage. Income from paid employment shall not exceed 1.25 times the amount of the minimum inter-professional salary (1187.50 euros).
• The amount of the benefit will be 50% of the minimum contribution base that corresponds to function of the activity.
• Along with the application, a sworn statement of the income received as a result of working for others will be provided.
Information by E.B.F Consulting S.L. E.B.F Consulting has been providing tax and accounting services to expatriates in Europe since 1999. Office is based in Lanzarote, Spain. Visit www.ebfconsulting.com for more details. Copyright© E.B.F Consulting 2021 All Rights Reserved.
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