Public grants in the Autonomous City of Melilla

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Has your business sustained losses due to COVID-19?

The Autonomous City of Melilla has launched a COVID-19 line of direct grants for self-employed workers and businesses to mitigate the impact of the pandemic. This public grants scheme forms part of Royal Decree 5/2021, which seeks to provide businesses and the self-employed with EUR 7,000 million in public aid.

What does the grant consist of?

The fixed-purpose grant may be used for the sole purpose of paying off debt, settling outstanding obligations with suppliers and other creditors, whether or not financial, and meeting the fixed costs incurred by the party applying for the grant, provided these payments accrued or fell due between 1 March 2020 and 31 May 2021 in relation to contracts signed prior to 13 March 2021. Under no circumstances are tax or Social Security debts eligible expenses under the grant.

How does the grant scheme work in the specific case of Melilla under RD 5/2021?

The Royal Decree calls on the Autonomous City of Melilla to announce the corresponding calls for applications for the granting of direct aid to beneficiaries located within its territory. The local body will also be responsible for processing, managing and deciding on applications, for making effective payment of the aid and for conducting pre- and post-payment checks. It must also monitor and ensure that the beneficiaries use the direct aid for its intended purposes.

Royal Decree Law 6/2021 aims to extend the eligible activities to other NACE activities that have been heavily impacted by the pandemic in this city. As a result, the aid has been made available to additional affected sectors in the Autonomous City of Melilla, beyond the 95 initially envisioned in Royal Decree 5/21.

Who is eligible?

The following persons are eligible for the direct aid:

Business owners or self-employed workers who have applied the objective estimation regime in respect of their personal income tax for 2019 and/or 2020 and who work in one or more of the eligible sectors.
Business owners, self-employed workers and entities operating within the eligible sectors who paid personal income tax in 2019 and 2020 under the direct estimation method for calculating income from economic activities and whose annual turnover declared or verified by the tax office fell by more than 30% in 2020 compared with 2019. In these cases, turnover means the total income obtained from their economic activity as included in their personal income tax return for 2019, and the total taxable income declared in their last split payment of personal income tax for financial year 2020.
Companies operating within the eligible sectors that pay corporate income tax and whose annual turnover as declared or verified by the tax office fell by more than 30% in 2020 compared to 2019.

The scheme is not available to business owners or self-employed workers, entities and consolidated groups that declared losses in their 2019 personal income tax return (under the direct estimation method), corporate income tax return or non-resident tax return.

What requirements must I satisfy?

Beneficiaries of the grants must meet the following requirements:

They must be registered for tax purposes in Melilla (subject to certain exceptions under Article 5.2 h of the Decree-Law¹).
They must show that they are engaged in one or more of the eligible activities classified in the relevant NACE system.
They must not have been the subject of a non-appealable ruling barring them from obtaining subsidies or public grants or for offences relating to prevarication, bribery, misappropriation of public funds, influence peddling, fraud, illegal collection of funds, or urban development offences.
They must not have instigated or caused the definitive termination of any contract entered into with the public authorities.
They must not have requested voluntary insolvency proceedings, or been declared insolvent or bankrupt under any type of proceeding (unless an agreement with creditors has been reached in such proceedings), and they must not be subject to judicial receivership or have been declared ineligible under Insolvency Law 22/2003 of 9 July, unless the period of ineligibility stipulated in the insolvency ruling has run its course.
They must not have tax residence in a country or territory officially classified as a tax haven.
They must be fully current and up to date with their tax and social security obligations.
They must be up to date with their repayment obligations in respect of other subsidies and public grants.

Article 5 of the Decree-Law describes the formula for calculating the turnover to be considered when determining the decline in activity for the various types of potential beneficiaries.

Aside from the above requirements, the beneficiaries of the grants must fulfil the following obligations:

They must continue to carry out the activity that makes them eligible for the grant up to 30 June 2022.
They may not pay out dividends in 2021 and 2022.
They may not approve any increase in the remuneration payable to senior management over a period of two years following approval of the grant.
They must report any information that may be required by the Autonomous City of Melilla to enable the proper processing and management of the grant.
They must provide the competent authorities of the City of Melilla with all information needed to ensure compliance with Law 1/2014 of 24 June.
They must agree to undergo any checks and financial control carried out by the financial accounting and control body, court of auditors or accounts chamber of the City of Melilla.
They must meet the general obligations set out in Articles 14.1 and 46.1 of Law 38/2003 of 17 November.

How much is the grant?

The amount of aid awarded will be equal to the total debt and fixed costs incurred between 1 March 2020 and 31 May 2021, provided that they arose from contracts signed prior to 13 March 2021, subject to the following limits:

Business owners or self-employed workers who apply the objective estimation method for personal income tax: the grant to be awarded will be the lower of the total amount sought in the application as eligible expenses and EUR 3,000.
Business owners and self-employed workers whose turnover for VAT or equivalent indirect tax purposes fell by more than 30% in 2020 when compared with 2019: the grant to be awarded will be the lower of the total amount sought in the application as eligible expenses and the following:

40% of the amount of the drop in turnover in 2020 compared to 2019 that exceeds the aforementioned 30% decline. This amount may not be less than EUR 4,000 or more than EUR 200,000 for business owners or self-employed workers who apply the direct estimation method for personal income tax, and for permanent establishments and companies with a maximum of 10 employees.
20% of the amount of the drop in turnover in 2020 compared to 2019 that exceeds the aforementioned 30% decline. This amount may not be less than EUR 4,000 or more than EUR 200,000, in the case of companies, business owners, self-employed workers and permanent establishments with more than 10 employees.

Companies that have undergone a restructuring process: the grant to be awarded will be the lower of the total amount sought in the application as eligible expenses and EUR 3,000.
For businesses that were incorporated or workers who started their activity after 31 December 2019: the grant to be awarded will be the lower of the total amount sought in the application as eligible expenses and EUR 3,000.

What documentation will I be asked to submit when applying?

The application form, duly completed and signed, must contain the following information:

Tax number of the applicant.
Tax address of the company or self-employed worker.
Whether the business owner or self-employed worker applied the objective estimation method for personal income tax in 2019 or 2020.
Whether the applicant is a consolidated group that pays corporation tax.
Whether, in 2019 and/or 2020, the applicant formed part of a group that applied a special-territory tax consolidation system, as well as a description of the composition of that 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/or 2020, the applicant 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.
Indication of whether the applicant intends to apply for grants in territories other than that in which it is registered for tax.
Indication of whether the applicant solely carries out operations not liable for tax or exempt from tax with no obligation to submit periodic VAT self-assessments, and entailing payment in instalments in accordance with the procedure described in Article 40.2 of Corporation Tax Law 27/2014 of 27 November.
A description of all public aid received in the last three years to date, including the name of the granting public body and date of concession, if applicable. If the total aid accumulated by the company exceeds EUR 1.8 million, proof must be provided of the fixed costs not covered by that aid and proof that the other requirements of the European Union’s rules on state aid have been met.
Amount of aid requested to cover debts, payments and fixed costs accrued between 1 March 2020 and 31 May 2021 under contracts signed prior to 13 March 2021. Where the requested amount exceeds the maximum amount permitted under Article 5 in each case, the application shall be deemed to have been made for that maximum amount.
Declaration of compliance with the circumstances set out in Additional Provision Four, section 1 of Royal Decree-Law 5/2021, of 12 March, on extraordinary measures to support business solvency in response to the COVID-19 pandemic.
Declaration of compliance with the commitments set out in Additional Provision Four of Royal Decree-Law 5/2021, of 12 March, to continue operating until 30 June 2022, not to pay out dividends during 2021 and 2022 and not to approve any increase in the remuneration of senior management for a period of two years from the granting of the aid.

The applicant must likewise provide the following documents:

Legally admissible documents reliably showing the powers vested in their legal representative/s (where applicable).
If the applicant explicitly refuses to allow the Autonomous City of Melilla to view and consult the tax information required under this call for applications, they must submit the certificates issued by the tax office described in Article 8 of the Governing Council Resolution of 19 July 2021.

How do I justify the use of my grant once approved?

Beneficiaries of the public aid must provide proof that they have used the funds for the purposes permitted under this grant. Beneficiaries must therefore present the following supporting documentation between 1 November 2021 and 31 March 2022, this being the deadline for repaying debts, making payments and meeting the fixed costs permitted under this grant:

The applicant must submit scanned receipts showing repayment of the debts, the fixed costs incurred and other payments made with the aid. These receipts must show the name of the recipient and the date of payment. When the creditors are financial institutions, a certificate from the financial institution attesting to total or partial repayment of the debt must be attached.
Once two years have elapsed from the date of approval of the subsidy, a certificate must be presented within the following three months to prove that no increases in the remuneration of senior management have been approved.
A breakdown of any other income or aid that may have been used to finance the eligible items, indicating both amount and awarding authority.
Letter of payment accrediting the reimbursement of any surplus not used, plus the corresponding interest.

The person or company benefiting from these grants must also, at 30 June 2022, continue to carry out the activity that rendered them eligible for the aid, and refrain from distributing dividends in 2021 and 2022. The tax office shall confirm both these circumstances to the Autonomous City of Melilla. Otherwise, the grants received must be returned.

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

Applications may be presented from 27 July to 15 October (both dates inclusive).

Applications shall be made using the official form and must be completed and sent electronically via the website of the Autonomous City of Melilla (https://sede.melilla.es).

By submitting an application, you authorise the Autonomous City of Melilla to request and obtain, from the Spanish Tax Agency (AEAT), the information provided for in this call for applications, in accordance with the General Law on Public Aid.

To learn more about the public grants scheme, please read the Official Gazette of the City of Melilla to consult the Decree-Law and find further information on the call (see link).

Appendix. List of NACE-09 activities added by the Autonomous City of Melilla.

CNAE-2009	DESCRIPTION OF ACTIVITY
0141	Raising of dairycattle
0142	Raising of other cattle and buffaloes
0149	Raising of other animals
0161	Support activities for crop production
0162	Support activities for animal production
0163	Post-harvest crop activities
0510	Mining of coal and lignite
0811	Quarrying of ornamental and building stone, limestone, gypsum, chalk and slate
0812	Operation of gravel and sand pits
0910	Support activities for petroleum and natural gas extraction.
1011	Processing and preserving of meat
1012	Processing and preserving of poultry meat
1021	Processing and preserving of fish, crustaceans and molluscs
1022	Manufacture of canned fish
1031	Processing and preserving of potatoes
1032	Manufacture of fruit and vegetable juice
1039	Other processing and preserving of fruit and vegetables
1043	Manufacture of olive oil
1071	Manufacture of bread; manufacture of fresh pastrygoods and cakes
1072	Manufacture of rusks and biscuits; manufacture of preserved pastry goods and cakes.
1073	Manufacture of macaroni, noodles, couscous and similar farinaceous products
1082	Manufacture of cocoa, chocolate and sugar confectionery
1085	Manufacture of prepared meals and dishes
1102	Manufacture of wine
1105	Manufacture of beer
1106	Manufacture of malt
1107	Manufacture of soft drinks
1330	Finishing of textiles.
1392	Manufacture of products produced from textiles, except wearing apparel.
1411	Manufacture of leather clothes
1412	Manufacture of workwear
1414	Manufacture of underwear
1511	Tanning and dressing of leather
1610	Sawmilling and planing of wood.
1622	Manufacture of assembled parquet floors
1623	Manufacture of other builders’ carpentry and joinery.
1629	Manufacture of other products of wood
1712	Manufacture of paper and paperboard.
2042	Manufacture of perfumes and toilet preparations
2314	Manufacture of glass fibres
2361	Manufacture of concrete products for construction purposes
2363	Manufacture of ready-mixed concrete
2364	Manufacture of cement
2370	Cutting, shaping and finishing of stone
2399	Manufacture of other non-metallic mineral products n.e.c.
2511	Manufacture of metal structures and parts of structures.
2512	Manufacture of metal structures and parts of structures.
2550	Forging, pressing, stamping and roll-forming of metal
2561	Treatment and coating of metals
2562	Machining
2620	Manufacture of computers and peripheral equipment
2640	Manufacture of consumer electronics
2651	Manufacture of instruments and appliances for measuring, testing and navigation
2811	Manufacture of engines and turbines, except aircraft, vehicle and cycle engines
2823	Manufacture of office machinery and equipment (except computers)
2830	Manufacture of agricultural and forestry machinery
2892	Manufacture of machinery for mining, quarrying and construction
3020	Manufacture of railway locomotives and rolling stock
3030	Manufacture of air and spacecraft and related machinery
3091	Manufacture of motorcycles
3092	Manufacture of bicycles and invalid carriages
3099	Manufacture of other transport equipment n.e.c.
3101	Manufacture of office and shop furniture
3102	Manufacture of kitchen furniture
3103	Manufacture of mattresses
3109	Manufacture of other furniture.
3240	Manufacture of toys and games.
3250	Manufacture of medical and dental instruments and supplies.
3299	Other manufacturing n.e.c.
3312	Repair of machinery
3314	Repair of electrical equipment
3317	Repair and maintenance of other transport equipment
3319	Repair of other equipment
3320	Installation of industrial machinery and equipment
3512	Transmission of electricity
3515	Production of hydroelectric power
3518	Production of wind power
3519	Production of other types of energy
3523	Trade of gas through mains
3600	Collection, treatment and distribution of water
3700	Collection and treatment of wastewater
3811	Collection of non-hazardous waste
3822	Treatment and disposal of hazardous waste
3831	Materials separation and classification
3832	Recovery of sorted materials
3900	Remediation activities and other waste management services
4110	Development of building projects
4121	Construction of residential buildings
4122	Construction of non-residential buildings
4211	Construction of roads and motorways
4212	Construction of railways and underground railways
4213	Construction of bridges and tunnels
4221	Construction of utility projects for fluids
4222	Construction of utility projects for electricity and telecommunications
4291	Construction of water projects
4299	Construction of other civil engineering projects n.e.c.
4311	Demolition
4312	Site preparation
4313	Test drilling and boring
4321	Electrical installation 1 43.22
4322	Plumbing, heat and air conditioning installation.
4329	Other construction installation
4331	Plastering
4332	Joinery installation
4333	Floor and wall covering
4334	Painting and glazing
4339	Other building completion
4391	Roofing activities
4399	Other specialised construction activities n.e.c.
4511	Sale of cars and light motor vehicles
4519	Sale of other motor vehicles
4520	Maintenance and repair of motor vehicles
4532	Retail trade of motor vehicle parts and accessories
4540	Sale, maintenance and repair of motorcycles and related parts and accessories
4611	Agents involved in the sale of agricultural raw materials, live animals, textile raw materials and semi-finished goods
4612	Agents involved in the sale of fuels, ores, metals and industrial chemicals
4613	Agents involved in the sale of timber and building materials
4614	Agents involved in the sale of machinery, industrial equipment, ships and aircraft
4615	Agents involved in the sale of furniture, household goods, hardware and ironmongery
4618	Agents specialised in the sale of other particular products
4619	Agents involved in the sale of a variety of goods
4621	Wholesale of grain, unmanufactured tobacco, seeds and animal feeds
4622	Wholesale of flowers and plants
4623	Wholesale of live animals
4631	Wholesale of fruit and vegetables
4632	Wholesale of meat and meat products
4633	Wholesale of dairy products, eggs and edible oils and fats
4641	Wholesale of textiles
4642	Wholesale of clothing and footwear
4643	Wholesale of electrical household appliances
4645	Wholesale of perfume and cosmetics
4646	Wholesale of pharmaceutical goods
4647	Wholesale of furniture, carpets and lighting equipment
4649	Wholesale of other household goods
4652	Wholesale of electronic and telecommunications equipment and parts
4662	Wholesale of machine tools
4665	Wholesale of office furniture
4671	Wholesale of solid, liquid and gaseous fuels and related products
4672	Wholesale of metals and metal ores
4673	Wholesale of wood, construction materials and sanitary equipment
4674	Wholesale of hardware, plumbing and heating equipment and supplies
4675	Wholesale of chemical products
4676	Wholesale of other intermediate products
4677	Wholesale of waste and scrap
4690	Non-specialised wholesale trade
4711	Retail sale in non-specialised stores with food, beverages or tobacco predominating
4721	Retail sale of fruit and vegetables in specialised stores
4722	Retail sale of meat and meat products in specialised stores
4723	Retail sale of fish, crustaceans and molluscs in specialised stores
4726	Retail sale of tobacco products in specialised stores
4729	Other retail sale of food in specialised stores
4730	Retail sale of automotive fuel in specialised stores
4752	Retail sale of hardware, paints and glass in specialised stores
4753	Retail sale of carpets, rugs, wall and floor coverings in specialised stores
4754	Retail sale of electrical household appliances in specialised stores
4759	Retail sale of furniture, lighting equipment and other household articles in specialised stores
4761	Retail sale of books in specialised stores
4763	Retail sale of music and video recordings in specialised stores
4773	Dispensing chemist in specialised stores
4775	Retail sale of cosmetic and toilet articles in specialised stores
4776	Retail sale of flowers, plants, seeds, fertilisers, pet animals and pet food in specialised stores
4778	Other retail sale of new goods in specialised stores
4779	Retail sale of second-hand goods in stores
4781	Retail sale via stalls and markets of food, beverages and tobacco products
4910	Passenger rail transport, interurban
4920	Freight rail transport
4941	Freight transport by road
4942	Removal services
4950	Transport via pipeline
5040	Inland freight water transport
5210	Warehousing and storage
5224	Cargo handling
5229	Other transportation support activities
5310	Postal activities under universal service obligation
5320	Other postal and courier activities
5811	Book publishing
5812	Publishing of directories and mailing lists
5819	Other publishing activities
5821	Publishing of computer games
5829	Other software publishing
5912	Motion picture, video and television programme post-production activities
5915	Motion picture and video production activities
5917	Motion picture and video distribution activities
5920	Sound recording and music publishing activities
6010	Radio broadcasting
6020	Programming and broadcasting activities
6110	Wired telecommunications activities
6120	Wireless telecommunications activities
6130	Satellite telecommunications activities
6190	Other telecommunications activities
6201	Computer programming activities
6202	Computer consultancy activities
6203	Computer facilities management activities
6209	Other information technology and computer service activities
6311	Data processing, hosting and related activities
6391	Web portals
	News agency activities
6399	Other information service activities n.e.c.
6511	Life insurance
6512	Non-life insurance
6621	Risk and damage evaluation
6622	Activities of insurance agents and brokers
6629	Other activities auxiliary to insurance and pension funding
6810	Buying and selling of own real estate
6820	Renting and operating of own or leased real estate
6831	Real estate agencies Management of real estate on a fee or contract basis
6910	Legal activities
6920	Accounting, bookkeeping and auditing activities; tax consultancy
7021	Public relations and communication activities
7022	Business and other management consultancy activities
7111	Architectural activities
7112	Architectural and engineering activities; technical testing and analysis
7120	Technical testing and analysis
7211	Research and experimental development on biotechnology
7219	Other research and experimental development on natural sciences and engineering
7220	Research and experimental development on social sciences and humanities
7311	Advertising agencies
7320	Market research and public opinion polling
7410	Specialised design activities.
7430	Translation and interpretation activities
7490	Other professional, scientific and technical activities n.e.c.
7500	Veterinary activities
7731	Renting and leasing of agricultural machinery and equipment
7732	Renting and leasing of construction and civil engineering machinery and equipment
7810	Activities of employment placement agencies
7820	Temporary employment agency activities
7830	Other human resources provision
8010	Private security activities
8020	Security systems service activities
8030	Investigation activities
8110	Combined facilities support activities
8121	Cleaning activities
8122	Other building and industrial cleaning activities
8129	Other cleaning activities
8130	Landscape service activities
8210	Photocopying, document preparation and other specialised office support activities
8211	Combined office administrative service activities
8291	Activities of collection agencies and credit bureaus
8292	Packaging activities
8425	Fire service activities
8510	Pre-primary education
8520	Primary education
8531	General secondary education
8532	Technical and vocational secondary education
8543	Higher education
8544	Post-secondary non-tertiary education
8551	Sports and recreation education.
8552	Cultural education
8553	Driving school activities
8559	Other education n.e.c.
8621	General medical practice activities
8622	Specialist medical practice activities
8623	Dental practice activities
8690	Other human health activities
8710	Residential nursing care activities
8720	Residential care activities for mental retardation, mental health and substance abuse
8731	Residential care activities for the elderly
8732	Residential care activities for the physically disabled
8790	Other residential care activities
8811	Social work activities without accommodation for the elderly
8812	Social work activities without accommodation for the disabled
8891	Child day-care activities
8899	Other social work activities n.e.c.
9003	Artistic creation
9105	Library activity
9106	Archives activity.
9312	Activities of sports clubs
9521	Repair of consumer electronics
9522	Repair of household appliances and home and garden equipment
9524	Repair of furniture and home furnishings
9602	Hairdressing and other beauty treatment
9603	Funeral and related activities
9609	Other personal service activities n.e.c.
9700	Activities of households as employers of domestic personnel

1.Groups and entrepreneurs, professionals or businesses whose volume of operations in 2020 exceeded EUR 10 million and who carry on their economic activity in more than one autonomous territory or community may take part in tenders in all the territories in which they operate.

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