Main tax changes introduced by RD-Law 20/2021, of 5 October, adopting urgent measures to repair the damage caused by the volcanic eruptions and for the economic and social reconstruction of the island of La Palma.
PERSONAL INCOME TAX (IRPF)
Exemption from aid for personal injuries
Paragraph 7 in Article 25 of Royal Decree-Law 20/2021 grants the exemption from Personal Income Tax to the exceptional aids for personal damages to those affected by the volcanic eruptions on the island of La Palma referred to in Article 4.
Reduction of the net income indexes for economic activities in objective estimation
Article 26 of Royal Decree-Law 20/2021 provides that the head of the Ministry of Finance and Public Administration, in view of the reports from the Ministry of Agriculture, Fisheries and Food, may exceptionally authorise the reduction of the net income rates referred to in Order HAC/1155/2020, of 25 November, which develops, for the year 2021, the objective assessment method for Personal Income Tax and the special simplified system of Value Added Tax, for agricultural holdings and activities in which damage has occurred as a direct consequence of the disasters resulting from the volcanic eruptions on the island of La Palma.
ECONOMIC ACTIVITIES TAX
Reduction in quotas
Section 2 in Article 25 of Royal Decree-Law 20/2021 grants a reduction in the Economic Activities Tax corresponding to the financial year 2021 to industries of any nature, mercantile, maritime-fishing, tourism and professional establishments whose business premises or assets related to this activity have been damaged as a direct consequence of the disasters caused by the volcanic eruptions on the island of La Palma, provided that they have had to be relocated or damage has been caused that forces the temporary cessation of the activity.
This reduction shall be proportional to the time elapsed from the day on which the cessation of activity occurred until its resumption under normal conditions.
In the event of cessation of the activity caused by the seriousness of the damage, it shall take effect from 31 December 2020.
Refund of amounts paid
Section 4 in Article 25 of Royal Decree-Law 20/2021 establishes that taxpayers who, being entitled to the benefits mentioned in the previous section, have paid the receipts corresponding to that fiscal year, may request a refund of the amounts paid .
LAW 49/2002, OF 23 DECEMBER, ON THE TAX SYSTEM FOR NON-PROFIT ORGANISATIONS AND TAX INCENTIVES TO PROMOTE PATRONAGE
Priority patronage activities
Article 28 of the Royal Decree-Law stipulates that, in accordance with the provisions of Article 22 of Law 49/2002, of 23 December, on the tax system for non-profit organisations and tax incentives for patronage, the recovery of the cultural heritage of the island of La Palma will be considered a priority patronage activity during the 2021 financial year.
por el que se adoptan medidas urgentes de apoyo para la reparación de los daños ocasionados por las erupciones volcánicas y para la reconstrucción económica y social de la isla de La Palma.