Public grants in the Autonomous City of Ceuta

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The Autonomous City of Ceuta has published a COVID-19 line of direct grants for the self-employed and businesses to mitigate the effects of COVID-19. This public grants scheme forms part of Royal Decree 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 payments to suppliers, including the wages of employees, and other creditors, financial or non-financial, and the fixed costs incurred by the party applying for the grant, provided the payments accrued between 1 March 2020 and 31 May 2021, in relation to contracts prior to 13 March 2021, and, in all cases, they must be actual monies pending payment at 31 May 2021.

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

Making use of the authorisations granted to the Autonomous Communities and Cities in RD 5/2021, Ceuta has extended the scope of the grant to sectors whose activity has been particularly affected, to a total of 157 eligible activities (62 CNAEs in addition to the 95 established in RD 5/2021).

Which persons can be beneficiaries?

The following persons or companies can be beneficiaries of the subsidies:

Entrepreneurs or professionals, entities, permanent establishments of persons or non-financial non-resident entities and groups carrying out any of the economic activities listed in Annexes I and II of the public notice, whose annual full volume of operations liable for tax, from economic activities (individuals) or net amount of turnover stipulated in the declaration of corporation tax, declared or verified by the tax authority, fell in 2020 by more than 30% with respect to 2019.
Entrepreneurs or professionals applying the objective-estimate personal income tax system carrying out any of the economic activities listed in Annexes I and II of the public notice.

What requirements must I satisfy?

In order to qualify as a beneficiary, the following requirements must be met:

Be registered for tax purposes in the Autonomous City of Ceuta. However, those who, although not registered for tax in Ceuta, had a turnover in 2020 of more than EUR 10 million and undertook their economic activity in this Autonomous City may participate in the call for applications.
They must have carried on at least one of the economic activities defined in Annexes I and II of the public notice in 2019 and 2020 (see link), and still be exercising this activity.
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 declared guilty, have given rise to the definitive termination of any contract drawn up with the authorities.
They must not have requested voluntary bankruptcy proceedings, they must not have been declared insolvent in any proceedings, they must not be in bankruptcy, 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.
They must be up to date concerning compliance with tax obligations and social security obligations.
They must be up to date with the payment of their obligations in relation to refunds of subsidies and public grants.

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

Maintain the activity corresponding to the grants up to 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 two years following approval of the subsidy.
Provide any information that may be required by the authorities of the Autonomous City of Ceuta, for proper administration and management of the subsidy.
They must submit to any checking and financial controls that may be carried out by the Autonomous City of Ceuta's Financial Accounting Department and the Court of Auditors.

How much is the grant?

The amount of the grant will be determined by the amount of eligible costs declared by the applicant, provided that they are within the following limits:

Entrepreneurs or professionals applying the objective-estimate personal income tax system: the subsidy will be approved as the lesser amount of the total sum set out in the application as subsidisable expenditure and EUR 3,000.
Entrepreneurs and professionals whose full volume of revenue liable for tax, from economic activities (individuals) or net amount of turnover stipulated in the declaration of corporation tax, declared or verified by the tax authority, fell in 2020 by more than 30% with respect to 2019: the subsidy will be approved as the lesser amount of the total sum set out in the application as expenditure that may be subsidised and the following:

40% of the fall in the full volume of revenue liable for tax from economic activities (individuals) or net amount of turnover stipulated in the declaration of corporation tax, declared or verified by the tax authority, which exceeds this 30%, an amount which cannot be less than EUR 4,000 or more than EUR 200,000, in the case of entrepreneurs or professionals applying the direct-estimate personal income tax system, and also in the case of entities and permanent establishments with no more than 10 employees.
20% of the amount of the fall in the full volume of revenue liable for tax from economic activities (individuals) or net amount of turnover stipulated in the declaration of corporation tax, declared or verified by the tax authority, which exceeds this 30%, an amount which cannot be less than EUR 4,000 or more than EUR 200,000, in the case of entities and entrepreneurs or professionals and permanent establishments with more than 10 employees.

In the case of companies that have carried out a structural modification of the business pursuant to the provisions of Article 6.3 of the public notice, the subsidy will be approved as the lesser of the total amount included in the application as subsidisable expenditure and EUR 3,000.
In the case of registration of activities or the incorporation of organisations after 31 December 2019, the subsidy will be approved as the lesser amount of the total sum set out in the application as subsidisable expenditure and EUR 3,000.

What documentation will I be asked for in the application?

The following information must be supplied in the application:

The data of the entity or the party concerned and, where applicable, of the representative.
Mobile telephone number and e-mail address of the party concerned, for the purposes of sending notification of information on availability in the PROCESA development company's Help Manager.
Indication of whether they intend to apply for grants in territories other than that in which they are registered for tax.
Whether, in 2019 and 2020, they formed part of a group applying a special-territory tax consolidation system, the composition of this group in 2020, and whether any of its companies paid VAT to a special-territory tax authority exclusively during those years.
Whether, in 2019 and 2020, they formed part of a group applying a common-territory tax consolidation system, and whether any of its companies exclusively paid VAT to a special-territory tax authority during those years.
A list of the debts, payments pending and fixed costs incurred pending to which the subsidy will be applied, in order as per the priority criterion stipulated in the public notice, with the limit of the maximum amount corresponding. For each of them, any data required in the standardised application form and, at least, identification data will be specified - identification of the supplier/creditor, the item, excluding indirect taxes, the total amount pending payment and the date of issuance.
Amount requested, which will be the sum of the amounts pending payment in relation to the debts, payments and fixed costs incurred that meet the preliminary requisites.
Bank account to enable the payment to be made.
CNAE activity code with respect to which the subsidy is being requested, within those established in Annexes I and II.
Certificates from the general social security treasury office and the tax authority treasury office that they are up to date in terms of compliance with tax obligations and social security obligations.
If the beneficiary is taking part in a structural modification operation, copy of the public deed and entry in the public register concerned, or document accrediting the operation, if no public deed is required to enter the operation concerned.
A responsible declaration by the signatory, as follows:

That they are acting as the representative of the applicant, and are authorised to represent it at the time of signature of the application, where applicable.
That they meet the requisites to act as the company or person benefiting from the subsidies.
That they are unaffected by any of the circumstances making them ineligible as a beneficiary.
That they are the holder of the bank account stated in the application to receive the subsidy.
That they have not applied for or obtained any other subsidies, grants, income or resources for the same purpose, from any public authorities or public or private domestic or foreign bodies which, alone or in conjunction with other subsidies or grants, exceed the amount of the activity subsidised. And, if they have applied for or obtained any other subsidies, grants, income or resources in the terms stipulated in this section, the declaration will state the body issuing, the date and the amount.
That they have not received or applied for any other public grants to finance the subsidisable expenditure for which they are submitting the application for subsidy, with the exception of the provisions of Article 10 paragraph 3 of the public notice.
That the list of debts, payments pending and fixed costs incurred pending payment, to which the subsidy regulated in this ruling will apply, meets the requisites of sections 1 and 5 of Article 7 of the public notice and, in particular, that the contracts and debts meet the requisites of duration and accrual and that the computer files attached match the digitalised copies of invoices or documents of equivalent probatory value in legal business traffic or with administrative efficiency for each of the debts, payments pending and fixed costs incurred pending payment.
That they undertake to refrain from approving any increases in the remuneration of senior management over a period of two years following approval of the subsidy, to maintain the activity relating to the subsidy at 30 June 2022, and to refrain from distributing dividends in 2021 and 2022.
That all the data in the application are genuine.
That, if they become a beneficiary, they undertake to comply with the conditions imposed and to maintain the requisites demanded over the period envisaged, and to notify any changes to same.

How is my grant justified when it is approved?

The beneficiary must submit the following demonstrative documentation between 1 November 2021 and 31 March 2022:

With respect to the list of debts, payments and fixed costs incurred that have been paid, presented along with the application, which cannot be modified, for each of these items digitalised copies demonstrating payment will be attached, showing the identification of the receiver of same, and the date of payment. When the creditors are financial institutions, a certificate from the financial institution attesting to total or partial cancellation of the debt will be attached.
Within a maximum period of three months, two years after the date of approval of the subsidy, the individual beneficiary or the beneficiary organisation will be obliged to present a certificate to show that no increases in the remuneration of senior management have been approved.
A breakdown of any other income or subsidies that have financed the items subsidised, with an indication of the amount and origin.
Where applicable, letter of payment of a refund in the event of any remainders not applied, and the interest they carry.

It is essential to bear in mind that application of the amounts of the subsidy approved for payment of subsidisable expenditure cannot be in cash, and must in all cases be via direct debit or bank transfer to the person or entity appearing as the party designated with the right to collect or by means of other banking formulae accrediting actual payment, provided evidence of payment is set out on a document showing only information concerning this transaction, and not any other payments, along with precise identification of the recipient and the item concerned, unless the creditors are financial institutions.

The beneficiaries of these grants must maintain the activity producing entitlement to them at 30 June 2022, and refrain from distributing dividends in 2021 and 2022, circumstances which will be notified by the AEAT tax agency in compliance with the agreement drawn up with the Autonomous City of Ceuta. Otherwise, the grants received must be returned.

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

The applications may be submitted from 20 July 2021 up to 30 September 2021.

The application must be completed in telematic format as per the procedure established in the PROCESA development company's Help Manager (see link).

Submission of applications will require the parties concerned to register with the PROCESA development company's Help Manager, thereby granting their express consent for all notifications to be sent to the e-mail address stated in their application.

Presentation of the application will also contain the express authorisation of beneficiaries to (i) obtain the necessary data from the state tax agency to determine eligibility as a beneficiary and to calculate the grant; (ii) transfer the data obtained from the state tax agency to PROCESA, to enable it, as a body charged by the City of Ceuta's Government with preparatory activities, to carry out its task in the terms stipulated.

For more information on the terms and conditions and the public notice of grants, see the Official Gazette of the Autonomous City of Ceuta of 19 July 2021 (see link).

Annex. List of CNAE-09 activities added by the Autonomous City of Ceuta.

CNAE-2009	ACTIVITY DESCRIPTION
3512	Electricity transportation
3513	Electricity distribution
3514	Trading in electricity
3515	Production of hydroelectric power
3516	Production of conventional thermal electricity
3517	Production of electricity using nuclear technology
3518	Production of electricity using wind power technology
3519	Production of electricity using other technologies
3521	Gas production
3522	Piped distribution of gaseous fuels
3523	Trading in piped gas
3530	Supply of steam and air conditioning
3600	Capture, purification and distribution of water
3700	Wastewater collection and treatment
3811	Collection of non-hazardous waste
3812	Collection of hazardous waste
3821	Treatment and disposal of non-hazardous waste
3822	Treatment and disposal of hazardous waste
3831	Separation and classification of materials
3832	Recovery of sorted materials
3900	Remediation activities and other waste management services
6110	Cable telecommunications
6120	Wireless telecommunications
6130	Satellite telecommunications
6190	Other telecommunications activities
6411	Central bank
6419	Other monetary intermediation
6420	Activities of holding companies
6430	Collective investment undertakings, funds and similar financial institutions
6491	Finance leases
6492	Other lending activities
6499	Other financial services, except insurance and pension funds not included elsewhere
6511	Life insurance
6512	Insurance other than life insurance
6520	Reinsurance
6530	Pension funds
6611	Administration of financial markets
6612	Brokerage activities in transactions with securities and other assets
6619	Other activities ancillary to financial services, excluding insurance and pension funds
6621	Risk and damage appraisal
6622	Insurance broker and agent activities
6629	Other activities ancillary to insurance and pension funds
6630	Fund management activities
8411	General public authority activities
8412	Regulation of healthcare, educational and cultural activities and other social services, excluding social security
8413	Regulation of economic activity and contribution to greater efficiency
8421	External affairs
8422	Defence
8423	Law
8424	Public order and security
8425	Civil protection
8430	Mandatory social security
9411	Activities of entrepreneurial and employers' organisations
9412	Activities of professional organisations
9420	Trade union activities
9491	Activities of religious organisations
9492	Activities of political organisations
9499	Other activities not included elsewhere
9700	Household activities as employers of domestic staff
9810	Household activities as producers of goods for own use
9820	Household activities as producers of services for own use
9900	Activities of extraterritorial organisations and bodies