How the Spanish government is addressing coronavirus concerns for the self-employed and small to medium businesses

Alongside the human impact of this crisis, the coronavirus is also having a detrimental impact on our economy. That’s why the Spanish government has responded with a 200 billion Euro aid package (equivalent to 20% of GDP), intended to counteract the drop in economic activity. Self-employed workers and SMEs are among those most affected by the current health crisis.

Here’s our guide to the measures to help businesses back on their feet, and for mitigating the impact of the upcoming recession.

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For companies which have seen a significant drop in their earnings, one of the most discussed measures is the option to implement a temporary redundancy plan under the ERTE scheme ("Expediente de Regulación Temporal de Empleo"). In return, the company must commit to retain its employees for at least six months after normal activity returns. If a company employing fewer than 50 people implements an ERTE, it will not have to pay any social security contributions. A company with more than 50 employees will be exempt from paying 75% of these statutory contributions.

The Spanish Tax Agency has approved a 6 month deferral on tax payments for SMEs and the self-employed, allowing tax payments including income tax (IRPF), VAT, payments on account and payments by instalment to be deferred. No interest will be accrued on arrears for the first 3 months. To take advantage of this measure, the transaction volume of the business must not have exceeded 6,010,121.04 euros in 2019.

Companies which are insolvent are not obliged to file for bankruptcy, but can wait until two months after the end of the state of emergency to commence proceedings.

The three most impacted sectors (tourism, leisure and transport) will receive a special extension of the credit line from the Instituto de Crédito Oficial, a state-owned credit institution. This credit line will be supplemented by an additional 200 million euros on top of the 200 million euros available since the start.

To ensure the liquidity of those companies hit hardest by the coronavirus crisis, the Spanish government has approved a first tranche of guarantees totalling 20 billion euros, 10 billion of which are earmarked for loans to the self-employed and SMEs which need them.

The Spanish government has announced a supplementary unemployment allowance for self-employed workers who have to close their businesses as a result of the state of emergency. It is also available to those who have experienced a 75% drop in turnover compared to the average for the previous six months. Self-employed workers must be up to date with their social security payments to apply for this benefit. The duration of this allowance will depend on how long the state of emergency lasts.

The European Central Bank has announced a program to purchase debt from companies across the euro area. The European Commission has also announced the creation of a fund of up to 120 billion euros to help mitigate the impact of this crisis.

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At N26, we haven’t needed to take any exceptional measures when it comes to providing our banking services. We are working from home to ensure the safety of our team, but since we're a digital bank offering a 100% mobile experience, we continue to function normally—just as we always have. But if you do have any questions or concerns, feel free to get in touch with the N26 Support Center by email, or by opening a chat directly in the app.

Update (May 2020): Our customers have been facing problems when managing payments coming from Spanish public institutions. Please read the letter from our General Manager about the topic relating to public benefits and N26 accounts.