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Order ECO/127/2021 published by the Community of Catalonia starts proceedings for preliminary registration for the COVID line of direct grants for the self-employed and businesses to mitigate the effects of COVID. This public grants procedure forms part of Royal Decree-Law 5/2021 ("RD 5/2021"), which sets out to provide companies and the self-employed with EUR 7,000 million in public grants.

What does the grant consist of?

The finalist grant consists of a sum of money which must be exclusively used to pay off debt and make outstanding payments to suppliers and other creditors, financial or non-financial, and the fixed costs incurred by the party applying for the grant and pending payment, provided the payments accrued between 1 March 2020 and 31 May 2021, in relation to contracts prior to 13 March 2021.

What are the specifications in Catalonia with respect to RD 5/2021?

The Order ECO/127/2021 (the "order") published by the Community of Catalonia starts proceedings for preliminary registration for the grants, a mandatory step to gain access to the subsidy, following the public notice for grants. In this regard, the official public notice with full details of the terms and conditions of the grant has not yet been published, because it will be defined on the basis of the information obtained from these proceedings.

These preliminary registration proceedings are established in order to clearly define the terms in which the grant must be approved, and to provide the authorities with relevant data to define the terms and conditions and the public notice for the grants.

The Order determines the purpose of the grants, the requisites that must be met by the parties concerned, the contents of the information that must be supplied during preliminary registration, the timeline and the mechanism for presentation of the information required.

In relation to other new features, the Community of Catalonia has expanded the subjective scope of beneficiaries of extraordinary direct grants initially provided for in Royal Decree 5/2021, to those sectors of activity most affected within the autonomous community, reaching a total of 191 admissible CNAEs.

Which persons can be beneficiaries?

The following persons can be beneficiaries of direct grants:

  • Entrepreneurs or professionals and companies operating in the sectors of activity listed in the annex to the Order (see link) in 2019 and 2020 that are still carrying on the activity, and whose annual volume of operations, in value-added tax (VAT) or equivalent indirect tax in 2020 fell by more than 30% with respect to 2019. Joint ownerships and civil societies are included.
  • Any entrepreneurs or professionals applying the objective-estimate personal income tax system (IRPF) and operating in the sectors of activity listed in the annex to the Order (see link) in 2019 and 2020, and still carrying on the activity.
  • Consolidated groups paying corporation tax in consolidated format whose group business in 2020 fell by more than 30% with respect to 2019.
  •   For the purposes of compliance with the requisites of eligibility and transfers, the recipient of the grant will be understood as a single taxpayer, instead of all the companies of which it is composed1.
  •   These groups must be operational and have employees who are resident for tax purposes in Catalonia.
  •   Any organisations that formed part of a group in 2019, but not in 2020, will be considered independent, and may apply for grants provided they meet the requisites in an individual format. In the case of a group, the application will be submitted by the company representing the group, and in any case this must include all the companies which formed part of the group in 2020.
  • Any entrepreneurs, professionals and companies applying the direct-estimate system with a volume of eligible debts pending that is equal to or more than EUR 4,000.

The following will not be considered eligible for grants: entrepreneurs or professionals, entities and consolidated groups which, even if they meet the requisites of the Order, declared negative net earnings for personal income tax in 2019 for any economic activities for which they applied the direct-estimate method for the purposes of determination or, where applicable, when the tax basis for corporation tax or non-resident income tax (IRNR) was negative, prior to application of the reserve for capitalisation and compensation of negative tax bases.



What requirements must I satisfy?

Entrepreneurs or professionals and companies with an interest may carry out preliminary registration if they meet the following requisites:

  • They must carry out one of the economic activities listed in the annex to the Order (see link) in 2019 and 2020, which must still be ongoing at the present time.
  • The annual volume of operations in their VAT return or equivalent indirect tax in 2020 must have fallen by more than 30% with respect to 2019.
  • They must be registered for tax purposes in Catalonia or be a permanent establishment, in the case of non-financial non-resident companies operating in Spain, excluding the scenarios stipulated in section 4 of Article 3 of Royal Decree-Law 5/20212.
  • They must not have been issued with grants for the same purpose to a total cumulative amount per company of EUR 1.8 million in direct grants and EUR 10 million in fixed cost grants in accordance with the national time framework reported to the European Commission.
    This amount is EUR 270,000 for companies in the fishing and aquaculture sectors, and EUR 225,000 for companies in the agricultural sector.
  • They must not have been convicted on a firm ruling barring them from obtaining subsidies or public grants or for offences relating to prevarication, bribery, misappropriation of public funds, influence peddling, fraud and illegal collection of funds or urban development offences.
  • They must not, for any proceedings in which they have been found guilty, have given rise to the definitive termination of any contract drawn up with the authorities.
  • They must be up to date with the payment of their obligations in relation to refunds of subsidies or public grants.
  • They must be up to date concerning compliance with their tax and social security obligations.
  • They must not have requested voluntary bankruptcy proceedings, they must not have been declared insolvent in any proceedings, they must not be bankrupt, unless an agreement has been reached in such proceedings, they must not be subject to judicial proceedings or have been declared ineligible as per Bankruptcy Law 22/2003 of 9 July if the period of ineligibility established in the bankruptcy ruling has not terminated.
  • Their tax residence must not be in a country or territory officially classified as a tax haven.

In addition to the above requirements, self-employed people (entrepreneurs and professionals) and non-financial companies applying for these grants must meet the following requisites:

  1. They must be the holder of the bank current account stipulated.
  2. They must not have been sanctioned in a firm ruling for serious infringements concerning the employment integration of people with disabilities, or for very serious infringements concerning employment relations or occupational health and safety, within the year preceding the public notice. If they have been sanctioned, they must have applied the corrective measures stipulated, and paid over the amounts required in these circumstances.
  3. They must meet the requisites stipulated in Articles 32.1, 32.3 and 36.4 of Linguistic Policy Law 1/1998 of 7 January (Regional Government of Catalonia's Official Journal Nº 2553 of 7.1.1998).
  4. They must never have received firm administrative rulings or firm conviction rulings, for carrying out or tolerating discriminatory employment practices due to sex or gender.
  5. They must have a system to organise and manage prevention pursuant to the regulations in force.
  6. They must meet the provisions of Law 17/2015 of 21 July on the effective equality of women and men.
  7. They must observe the right to accessibility for people with disabilities pursuant to Law 13/2014 of 30 October on accessibility.
  8. They must observe the regulations in force in relation to sustainable development.
  9. They must comply with the provisions of Article 13.5 of Law 26/2015 of 28 July on amendments to the system for protection of infants and adolescents.
  10. They must comply with regulations governing intellectual property.
  11. They must comply with the other requisites and obligations stipulated in the regulations in force concerning subsidies and the sector regulations applicable.

In addition to these requisites, the beneficiaries of the grants must undertake the following commitments and obligations:

  • Maintain their activity until 30 June 2022.
  • Refrain from distributing dividends in 2021 and 2022.
  • Refrain from approving any increases in the remuneration of senior management over a period of 2 years.
  • Preserve and keep in custody accreditative documentation showing the application of the funds received, and place this at the disposal of the authorities in the Regional Government of Catalonia for any checking activities, and for any purposes of checks on economic and financial activity by the financial accounting section of the Regional Government of Catalonia, the accounting commission or other competent national or EU bodies. They must also supply any information that is required of them to justify the conditions that accredit compliance with the requirements to receive this grant.
  • They must comply with Article 55.2 of Law 19/2014 of 29 December on transparency, access to public information and good governance, and accept the ethical principles and rules of conduct in respect of which beneficiaries must adapt their activity.
  • They must comply with the other obligations stipulated in the regulations in force concerning subsidies and the sector regulations applicable.



How much is the grant?

The amounts will be determined by the terms and conditions of the grant, which have yet to be published, at all times within the maximum limits established by RDL 5/2021.

What documentation will I be asked for in the application?

The requisites that must be met by applicants for approval of the grants will be accredited by cross-references of the necessary data with the state tax authority which will include the necessary information in each case, and also through the responsible declarations made by the parties concerned on the preliminary registration form. In this regard, the preliminary registration will not require any documents to be supplied in addition to the data required for the form.

The preliminary registration form includes the following data to be supplied:

  1. Basic data concerning the company, entrepreneur or professional applying for the grant and/or concerning their representative, for the purposes of identification, capacity, notification, checking and contact in relation to the procedure for approval of the grants.
  2. The bank details of the company, entrepreneur or professional applying.
  3. Data concerning the activity carried on by the company, entrepreneur or professional applying.
  4. Data concerning the consolidated group of which the company, entrepreneur or professional applying forms part.
  5. Tax data concerning the volumes of operations carried out in relation to the economic activity subsidised, in 2019 and 2020.
  6. Data concerning the number of male and female employees of the company, entrepreneur or professional applying.
  7. The amount of the debt for which the grant is being requested, broken down into a typology of debts to suppliers, other financial and non-financial creditors, and the fixed costs of the company, entrepreneur or professional applying.

How is my grant justified when it is approved?

The process of providing justification for the grants and any accreditative documentation will be determined by the terms and conditions of the grant, which have yet to be published.

What is the deadline, and how can I apply for the grant?

The preliminary registration form may be submitted from 21 June 2021 to 30 June 2021 at 15.00.

The preliminary registration must be formalised on the website of the Regional Government of Catalonia only, and the identification systems and the electronic signature must be accepted by the "Generalitat" government authorities.

For the preliminary registration, parties concerned who meet the requisites established for these grants must fill in and submit electronically the form on the "Canal Empresa" corporate proceedings portal (see link).

The parties concerned must consider that submission of the preliminary registration form is a necessary condition for them to receive the extraordinary grant, provided there is compliance with the requisites that may be established for approval, in the terms and conditions and also in public notices concerning the grants. When the public notices concerning extraordinary grants have been published, with no other steps to be taken by the party concerned, submission of the preliminary registration form, duly filled in with the data required, entails application for the grant.

For more information on public grants, consult Order ECO/127/2021 of 14 June 2021 in the Official Journal of Catalonia's "Generalitat" government (see link).

Annex. List of CNAE-09 activities added by the Autonomous Community of Catalonia.

CNAE-2009

ACTIVITY DESCRIPTION

170

Hunting, capture of animals and related services

1021

Processing of fish, crustaceans and molluscs

1061

Manufacture of grain mill products

1071

Manufacture of bread; manufacture of fresh pastry goods and cakes

1081

Production of sugar

1082

Production of cocoa, chocolate and confectionery products

1084

Production of spices, sauces and condiments

1085

Production of ready-prepared food

1107

Manufacture of non-alcoholic beverages; production of mineral waters and other bottled waters

1320

Manufacture of textile fabrics

1391

Manufacture of knitwear fabrics

1393

Manufacture of rugs and carpets

1412

Production of work clothes

1431

Production of stockingwear

1511

Preparation, tanning and finishing of leather; preparation and dying of hides

1512

Production of leatherwork items, travel wear, saddlery and harnesses

1629

Production of other wood products; cork items, for basketmaking and esparto grass products

1711

Manufacture of paper pulp

1722

Manufacture of paper and cardboard items for domestic, sanitary and hygiene use

2013

Manufacture of other inorganic basic chemical products

2015

Manufacture of fertilisers and nitrogen compounds

2016

Manufacture of primary-format plastics

2060

Manufacture of man-made fibres

2313

Manufacture of hollow glass

2331

Manufacture of ceramic tiles and slabs

2341

Manufacture of ceramic items for household and ornamental use

2344

Manufacture of other ceramic products for technical usage

2349

Manufacture of other ceramic products

2351

Production of cement

2352

Production of limestone and gypsum

2363

Production of fresh concrete

2420

Manufacture of tubes, pipes, hollow profiles and related fittings, in steel

2445

Other non-ferrous metal production

2530

Manufacture of steam generators, excluding boilers for central heating

2571

Production of knives and cutlery

2652

Manufacture of watches and clocks

2720

Manufacture of batteries and accumulators

2732

Manufacture of other electronic and electric wires and cables

2740

Manufacture of lamps and electrical lighting equipment

2752

Manufacture of non-electric domestic appliances

2821

Production of ovens and burners

2841

Manufacture of metal forming machinery

2891

Manufacture of machinery for the metallurgy industry

2895

Manufacture of machinery for paper and paperboard production

2896

Manufacture of plastic and rubber machinery

2910

Manufacture of motor vehicles

2932

Manufacture of other components, parts and accessories for motor vehicles

3011

Construction of boats and floating structures

3020

Manufacture of locomotives and railway rolling stock

3099

Manufacture of other transport equipment not classified elsewhere

3220

Manufacture of musical instruments

3821

Treatment and disposal of non-hazardous waste

4122

Construction of non-residential buildings

4641

Wholesale trading in textiles

4642

Wholesale trading in clothing and footwear

4651

Wholesale trading in computers, peripherals and computer programmes

4661

Wholesale trading in agricultural machinery, equipment and supplies

4663

Wholesale trading in machinery for mining, construction and civil engineering

4664

Wholesale trading in machinery for the textile industry and sewing and knitting machines

4671

Wholesale trading in solid, liquid and gaseous fuels and similar products

4677

Wholesale trading in scrap metal and refuse products

4729

Other retail trading in foodstuffs in specialist establishments

4730

Retail trading in automotive fuel in specialist establishments

4763

Retail trading in recordings of music and videos in specialist establishments

4779

Retail trading in second-hand items in establishments

4950

Pipe transportation

5224

Goods handling

5814

Magazine publishing

5821

Publishing of video games

5912

Activities involving post-production of films, videos and television programmes

5915

Activities involving film and video production

5917

Activities involving film and video distribution

6130

Satellite telecommunications

6399

Other information services not included elsewhere

7312

Communication media representation services

7410

Specialist design activities

7810

Placement agency activities

7820

Temporary employment agency activities

7830

Other provision of human resources

8030

Research activities

8211

Combined administrative services

8220

Call centre activities

8520

Primary education

8531

General secondary education

8532

Technical and professional secondary education

8543

University education

8551

Sport and recreational education

8552

Cultural education

8559

Other education not included elsewhere

8790

Other care activities in residential establishments

8891

Daytime child care activities

9003

Artistic and literary creation

9106

Archiving activities

9312

Sports club activities

9524

Repair of furniture and household items

9602

Hairdressing and other beauty treatments

Direct Grants Simulator

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Find your Community's Direct Grants

Andalusia

249 economic activities accepted in the call.

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Aragón

Scope of aid extended to more sectors with 491 activities.

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Balearic Islands

Public grant from the Administration of the Balearic Islands.

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Basque Country

The grants are divided into three eligible lines.

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Canary Islands

It broadens the scope to the bulk of economic sectors.

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Cantabria

Aid to satisfy outstanding debts and payments.

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Castilla - La Mancha

The aid reaches 395 economic activities.

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Castilla y León

Public grant from the Community of Castilla y León.

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Catalonia

The subjective scope of grant beneficiaries has been extended.

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Ceuta

Applications may be submitted until 30 September 2021.

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Community of Madrid

They will be extended to 176 economic activities.

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Community of Valencia

Grant to support business solvency.

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Extremadura

Beneficiaries extended to the most affected sectors in the community.

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Galicia

The grants are distributed into three programs.

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La Rioja

Aid to companies and the self-employed to alleviate the effects of Covid.

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Melilla

For payment of debt, suppliers and other creditors.

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Navarra

Entities without legal personality may apply for this aid.

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Principality of Asturias

The grants are divided into 4 eligible categories.

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Region of Murcia

Grants classified into different categories.

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