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Coronavirus COVID-19

Executive Summary of the Special Information Briefing COVID-19 (No. 18): Impact of the state of alarm on corporate income tax for the 2019 tax year

12/05/2020

The purpose of this Executive Summary is to highlight the main effects that the state of alarm could have on the preparation and filing of 2019 income tax returns.

The declaration of the state of alarm caused by the COVID-19 health crisis has led to the establishment of a series of temporary and extraordinary measures to protect the health and safety of citizens. The current situation is causing operational problems for the Spanish business sector as a whole, as well as significant cash-flow problems, and has forced many companies to seek external financing to sustain structural costs while revenue from business activities is unavailable.

In many sectors, these cash flow constraints may continue over the coming months, during which time Spanish companies must file their 2019 Corporate Income Tax (“CIT”) returns. The CIT assessment of the 2019 tax year may be significant since it is calculated on the basis of the accounting result obtained as of 31 December 2019 and may coincide with a very difficult financial period for Spanish companies.

Therefore, we would like to briefly summarise some of the effects that the state of alarm could have on the preparation and filing of the 2019 CIT return, as well as some tax incentives whose application can still be considered by taxpayers.

The entire content of the Executive Summary can be found in the PDF.

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