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The low retentions in the furlough scheme, a headache in the 2021 income tax return

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Miguel Ángel Galán analyzes the workers' ERTE during next year's tax return

Be careful, be alert, even though in practice these warnings may be of little use. Workers who remain embroiled in the furlough scheme will receive a scare in 2021 on next year's income tax return, despite the difficulties they already have in receiving the money, with multiple delays and threats of fines. The reason is that the State, who pays those payrolls through the State Employment Service (SEPE), hardly retains any of the income, and the worker who receives it will not become aware of it until he has to file the corresponding income tax return.

Miguel Ángel Galán, Partner in Andersen's Tax Department, points out that, the SEPE acts as a second payer which is additional to the worker's usual company.

Deductions for maternity?

The point is that everything is being questioned, and there could be social unrest if, in addition, the collapse of SEPE continues, since more than 150,000 Spanish workers have not yet received any income from the furlough scheme. Is there time to rectify this? Galán states that fiscal reform could be promoted before December 30th and retroactively. The problem is that there are no clear majorities in Congress to make such decisions at this time.

A direct consequence of the income tax return in Covid-19 times will be the elimination of the deduction for maternity for workers who have children under three years old. This is a deduction of 1,200 euros per year, although with the possibility of requesting an advance payment of 100 euros per month. Galán said that, in the case of being in a furlough scheme with the subsequent suspension of the employment contract those 100 euros are lost.

The full article can be read in Crónica Global

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