In the Official Gazette of the Canary Islands of 2 March 2021, the Canary Islands Government published the Decree-Law 2/2021, of 1 March, which regulates the direct granting of subsidies aimed at maintaining the economic activity of self-employed workers and small and medium-sized enterprise in the sectors most affected by the crisis resulting from the expansion of COVID-19, whose most relevant aspects are set out below, although each particular case and its specificities must be taken into account to verify whether the requirements are met, for which we remain at your disposal.
This Decree distinguishes between two lines of subsidies:
– Line 1: Subsidies aimed at maintaining the activity of self-employed persons without employees.
– Line 2: Subsidies aimed at maintaining the activity of small and medium-sized companies and self-employed persons with employees.
BENEFICIARY PERSONS AND COMPANIES
The following may be beneficiaries of these subsidies:
1.- Self-employed persons and small and medium-sized enterprises, whatever their legal form, which carry out in the Canary Islands, primarily, an economic activity included and registered in one of the groups or headings of the Tax on Economic Activities (IAE) listed in Annex 3 of the Decree-Law. In the case of small and medium-sized enterprises, they must have a permanent establishment in the Canary Islands, where the activity to be subsidised is carried out. For these purposes, the following definitions apply:
o Self-employed persons: natural persons without employees who regularly, personally and directly carry out an economic activity, including dependent self-employed persons. The following are excluded from this concept:
o Self-employed persons who only carry out self-employed activity within companies without legal personality (civil, private or professional companies, communities of property), cooperatives or trading companies, even if they are not members.
o Corporate self-employed persons, understood as those who work for a company as self-employed persons and, at the same time, hold part of the company’s share capital, or are part of the company’s administrative bodies.
Small and medium-sized enterprises (SMEs), including self-employed persons with employees: All those entities that, regardless of their legal form, carry out an economic activity and comply with the definition established by the European Union, which considers SMEs to be companies that employ fewer than 250 people and whose annual turnover does not exceed 50 million euros or whose annual balance sheet does not exceed 43 million euros.
2.- Communities of property or any other type of economic unit or entity which, although lacking legal personality, carry out an economic activity and are profit-seeking, and fall into one of the categories established in the previous section, depending on the number of people they employ and their annual turnover or annual balance sheet.
Self-employed persons and small and medium-sized enterprises that are registered in 2019 and 2020 and continue to be active at the entry into force of this Decree-Law under the IAE headings described in Annex 3 of the Decree-Law and have suffered a reduction equal to or greater than 30% in the sales volume in the second half of the year 2020 compared to the same half of 2019, may obtain the status of beneficiaries.
Self-employed workers and small and medium-sized enterprises in which any of the following circumstances apply will not be eligible to obtain the status of beneficiary:
o A public trading company or other company whose capital or governing bodies are held by Public Administrations or entities that depend on these.
o Having been sanctioned or condemned by administrative resolution or sentence, both final, for exercising or tolerating labour practices considered discriminatory for reasons of sex or gender in the last 2 years.
o That they were already in crisis on 31 December 2019, in accordance with the provisions of Commission Regulation (EU) No 651/2014 of 17 June 2014.
DESTINATION OF THE SUBSIDIES
The subsidies shall be aimed at financing the working capital needs to enable the person or company to operate and meet their payments relating to fixed operating costs, which are:
1. Amounts paid for the lease of movable and immovable property associated with the business premises where the economic activity is carried out and fees for the right to use the different embodiments of intellectual property.
2. Non-social insurance premiums.
3. Current supplies (electricity, water and communications).
CONTENT AND DETERMINATION OF THE AMOUNT
The subsidy will consist of a single payment, for a maximum amount of 25,000.00 euros. However, the amount will be obtained by applying the formula indicated in the Decree based on the following three factors:
1. The economic sector to which the company belongs.
2. The number of full-time equivalent workers.
3. The percentage reduction in turnover suffered between the second half of 2020 and 2019, according to certain intervals.
The procedure for granting these subsidies shall be under a direct concession regime without prior call.
The subsidy will be granted, until the available credit runs out, on the basis of the date of submission of the complete subsidy applications, or if they are not complete, on the date when all the necessary documentation is submitted, once any omissions or defects, where applicable, that may have been detected by the examining body have been rectified.
Applications for subsidies will be submitted electronically at the headquarters of the Public Administration of the Autonomous Community of the Canary Islands and the Canary Islands Employment Service, from 10 March 2021 and for a period of 20 working days, that is, until 8 April 2021.
In the processing of the applications, the order of submission of the same in the electronic headquarters of the Public Administration of the Autonomous Community of the Canary Islands will be kept; therefore, they must be submitted as soon as possible with all the required documents; since, once the available credit runs out, the applications that have not been dealt with will be rejected.
Together with the subsidy application, applicants must provide, in addition to a declaration of responsibility regarding the compliance with the requirements to access the subsidies, census declarations at the AEAT and ATC; registration at the RETA in the case of the self-employed; the certificate from the professional association and registration with the professional mutual insurance if applicable; the report on the number of employees at 31 December 2020, in the case of applications for line 2 of the subsidies.
In addition, in order to prove the sales volume for the second half of 2019 and 2020, the alternative documentation must be provided, for both periods, as indicated below and in the following order of preference:
1. Form 420.
2. Form 425.
3. Forms 130 and/or 131.
4. Accounting books.
5. Any other documentation that allows verification of the reduction in the sales volume between the last six months of 2020 and 2019.
The subsidy award decisions must be notified within a period of 3 months from the date of submission of the subsidy applications, that is, in June 2021, by publishing them on the Notice Board of the electronic headquarters of the Public Administration of the Autonomous Community of the Canary Islands and the Canary Islands Employment Service. Once this period has expired without an express decision being taken, the subsidy application will be deemed rejected.
It is therefore essential that applicants remember to have a valid digital certificate.
OBLIGATIONS OF THE BENEFICIARIES
The beneficiary persons and companies are obliged to:
1. Maintain the activity that motivates the granting of the subsidy until at least six months after the publication of the Decree-Law in the Official Gazette of the Canary Islands, that is, until 2 September 2021.
2. Communicate any alterations in the circumstances and requirements taken into account for the granting of the subsidy.
3. Justify the requirements and conditions and compliance with the purpose determining the granting or enjoyment of the subsidy.
4. Comply with verification and control actions by the competent control bodies.
5. Communicate other subsidies, aid, incomes or resources that finance the subsidised activities coming either from public or private entities.
6. Be up to date with their tax and Social Security or professional mutual insurance obligations.
7. To have duly audited accounting books, duly filled in records and other documents in the terms required by the applicable commercial and sectorial legislation.
8. Keep the documents justifying the application of the funds received for 10 years.
9. Use the subsidy to cover the company’s needs to try to recover its level of activity prior to the crisis generated by COVID 19, covering its working capital needs and enabling it to operate normally and meet its payments.
10. Proceed, if necessary, to reimburse the funds received, in accordance with Article 18 of the Decree-Law.
11. Provide, by the same means as the submission of applications, within a period of seven months from the publication of the Decree-Law in the Official Canary Islands Gazette, that is, until 2 October 2021, the form included as Annex 4, together with the following documentation, unless they have given authorisation to the Administration to consult it: Certificate issued by the State Tax Administration Office on the information corresponding to the headings of the Economic Activities Tax (IAE), in which they are registered and updated employment report, in the case of self- employed workers without employees.
REIMBURSEMENT OF SUBSIDIES
In addition to the grounds for invalidity of the subsidies granting resolution, set out in Article 36 of Law 38/2003, of 17 November, on general subsidies, and the grounds for reimbursement contained in Article 37 of the same legal text, the imposition of sanctions declared final on the beneficiary individuals and companies for failing to comply with the measures to contain the spread of COVID-19 , will be grounds for reimbursement of the subsidies.
In the event of reimbursement, interest for late payment shall also be charged from the date of payment of the subsidy until the reimbursement source of such subsidy is agreed.