Changes to defer tax payments in 2017

We’re starting the year by telling you about the changes that come into effect in 2017 for deferring tax payments.

Until now, requesting a deferral of tax payments was relatively easy. However, things will change from now on, and we regret to tell you that it will not be possible to defer tax payments.

Companies must be updated with almost all their taxes. The cases in which they can be deferred are drastically reduced. Below, we tell you everything you need to know so you are aware of the situation.

Background

In 2016, it was simple enough for a company to defer tax payments. The legislation allowed for a request for a deferral in a pervasive case in companies:

• Temporary lack of liquidity: If a company was experiencing a period of lack of liquidity, a deferral could be requested to make the payment effective once liquidity had been recovered.
• Debts exceeding €30,000: a deferral could also be requested, but unlike the previous case, payment guarantees were required.

These cases allowed for a request for a deferral of tax payment, but now, with the arrival of 2017, companies must consider that things will no longer be the same.

What has changed in 2017?

Mainly, it has become much more restrictive. There are new cases in which deferring tax payments is not allowed, so you should know them all to avoid sanctions for not knowing the new legislation.

• Withholdings made: on income from work, professional activities, interest, dividends, etc. The company’s guarantee is no longer of interest to the tax agency; although the company may go bankrupt, it should not stop paying; it is a big change and a possible problem for thousands of SMEs in this country.
• Debts suspended due to filing an appeal: from now on, once the procedure is resolved and there is a firm resolution, payment will be required without being able to request a deferral.
• Debts for split payment of corporate tax: it will no longer be possible to split the payment. However, it is possible to continue deferring taxes on fractional payments by entrepreneurs in direct or objective estimation.

The tax charged is still being discussed; as soon as something definitive is known, we will inform you in detail.

Deferring VAT

In principle, the deferral of VAT will be prohibited. Fortunately, a situation has been established in which it can be deferred. If the company justifies that the charged quotas have not yet been collected, it can defer payment.

A new payment date must then be proposed that aligns with the time when the outstanding quotas will be collected. An approximation will have to be established since it is difficult to know the exact day the payment of outstanding quotas will occur.

Conclusions

These new tax deferral cases are not negotiable. Please do not ask to defer payments in the abovementioned cases, as they will be denied. The application will be declared inadmissible, and if the payment deadline is exceeded, a fine of up to 20% interest will be imposed.

This new way of paying taxes is going to bring many headaches. Therefore, the best thing to do is to trust a professional.

We are at your disposal for any questions you may have, and if you can leave a comment or provide information, it will undoubtedly be welcome.

If you need to know more, you can consult our Tax Advice service.