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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:

  1. Tax number of the applicant.
  2. Tax address of the company or self-employed worker.
  3. Whether the business owner or self-employed worker applied the objective estimation method for personal income tax in 2019 or 2020.
  4. Whether the applicant is a consolidated group that pays corporation tax.
  5. 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.
  6. 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.
  7. Indication of whether the applicant intends to apply for grants in territories other than that in which it is registered for tax.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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:

  1. Legally admissible documents reliably showing the powers vested in their legal representative/s (where applicable).
  2. 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

    Direct Grants Simulator

    Find out how much of a direct grant your business could benefit from.

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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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