Last July, the Congress of Deputies in plenary session approved the Royal Degree Act 8/2014 of 4th July, on urgent measures for growth, competitiveness and efficiency, which introduces numerous legislative and fiscal measures, aimed to encourage competitiveness and efficient market operation. It includes three principals focus of action:
1.- Encouragement of competitiveness and efficient market operation:
This first range of measures contains all those legislative modifications related to trade liberalization, and to increase the efficiency and the competitiveness of the port and airport infrastructures.
It pretends to support the maintenance of the deficient airport infrastructures, as well as freezing their tariffs. As the Airport Regulation Document (ARD) establishes, their tariffs will not increase until year 2025. In addition, the new ruling guarantees the ports competitiveness creating the Financial Fund, which is destined to finance the road and railway infrastructures in order to make a connection with ports and increase the port concessions from 35 to 50 years, with the ultimate goal of guaranteeing the citizens’ mobility and the economic, social and territorial cohesion.
This first range of measures also establishes initiatives concerning energy sectors mainly aimed to guarantee the sustainability and accessibility of the hydrocarbons market. In addition, it determines measures aimed to set up an energetic efficiency system in line with the European guidelines, reforming the natural gas and guaranteeing their economic and financial sustainability with a new payment framework.
Furthermore, this first range includes measures related to the commercial and cinematographic sector, as well as to the sector of temporary employment agencies, adapting their regulation to the Guarantee of Market Unit Act.
2.- Improvement of access to finance and boost of the economical activity:
Through the implementation of measures as the reform of the finance conditions by the Financial Fund for Payments to Suppliers (FFPS), which allows the local entities to cancel their debts with the FFPS, a progress is made towards the liberalization of the public sector financial needs and an improvement of the liquidity and the financial situation of the Local Government bodies.
Additionally, within the framework of improving the access of Spanish Small and Medium-sized Enterprises to external finance and encourage their internationalization process, the present Act implements a guarantee and security program by the Official Credit Institute in favor of Multilateral Organisms and International Financial Institutions, for a maximum amount of €1.200 millions and of one-year duration.
Besides, the rule bets for the extension of the “major tourist zones” and their consequent extension of business hours, as well as for the simplification of administrative paperwork to open, move and increase the business establishments of retail trade.
3.- Promotion of the employability and the occupation:
This third range includes measures for employability and occupation promotion, especially of young people, with the implementation of a monthly discount in the employer’s contribution to Social Security. This discount is of €300, during a maximum period of six months, for the unlimited hiring of people benefitting from the Young Guarantee National System. To enjoy this discount, the hiring must be signed before 30th June 2016, the activity to develop must not be included in any of the special systems established in the General Social Security System, and the company must find itself up-to-date in the payment of its tax obligations. This measure will be compatible with all type of bonus as long as the monthly amount that the employer or the self-employed has to pay to the Social Security is not negative.
If the contract signed with a Young Guarantee National System beneficiary has as purpose training and learning, the discount in the employer contribution to the Social Security foreseen to finance the training costs attached to aforementioned contract will be raised to the maximum amount. At the same time, an additional discount will be recognized to finance the costs deriving from the obligatory tutoring of each employee.
The Royal Degree Act also establishes the modification of Act 11/2013, of 26th July for entrepreneur support measures and the encouragement of the growth and the job creation with the purpose of including the Young Guarantee National System beneficiaries in the different bonus foresee in the aforementioned Act 11/2013. This modification even improves some of the bonus. An example of this is the discount of 50 or 75 per cent in the common contingencies contribution foreseen for the trainees will be increased to 100 per cent if the employee is a Young Guarantee National System beneficiary.
Besides, some modifications of Act 56/2003, of 16th December on employment are included with the purpose of establishing the legal basis for the introduction of the employment Start-up Strategy. This reform seeks to facilitate the relationships between young people, employers and administration, creating a network of services and programs for orientation, training, employment opportunities and entrepreneurship, so that young people have grater information and knowledge to be attractive to companies.
Finally, the aforementioned Royal Degree also includes some tax measures, as the exemption in the capital gains as result of payment in kind to settle debts or foreclosures involving the principal residence and the guarantee of a reduced tax to the deposits with credit institutions in all the national territory.
In relation to Personal Income Tax (PIT), the new regulation also establishes that the taxpayer with less incomes who carries out professional activities will benefit of a limited tax rate of 15 per cent in the withholding, as long as in the earlier fiscal year the whole incomes for these activities have been under €1500, provided that these incomes represent more than the 75 per cent in the sum of the whole economic and work incomes.
All these measures seek to encourage the present and future growth and competitiveness in the corporate economy and finance. They encourage the employment and the hiring, and concede benefits and advantages for employees and employers.
The information contained in this note should not be regarded in itself as specific advice on the matter discussed, but only a first approach to the subject. Therefore it is highly recommended that the recipients of this note search professional advice about their particular case before taking specific measures or actions.