Deferring tax payments in Mallorca is the strategic solution when you face a cash flow problem. In the tax arena, cash flow issues don't discriminate based on legal structure; it can affect a Mallorcan family receiving an unexpected inheritance, a self-employed individual experiencing payment delays, or a limited liability company needing to invest its cash in inventory instead of paying taxes immediately.
The General Tax Law offers a lifeline in these situations. At Resitax, as tax advisors in Mallorca, we explain how to manage these procedures to save time and peace of mind when dealing with the tax authorities.
The basic concept: Gaining time through splitting payments
Before analyzing each profile, let's review the available tools. Regardless of your legal status, the options are:
- Deferral: "I'll pay it all at once, but later."
- Installment payment: "Payment little by little in monthly installments" (like financing).
The goal is to avoid enforcement proceedings, which carry surcharges of 5% to 20% and a real risk of asset seizure. If you are also facing a fine, it is vital to check whether the tax penalty has expired before proceeding.
Deferral solutions tailored to your profile
Although the mechanism is similar, the origin of the debt varies depending on the taxpayer.
Individuals and families (Natural Persons)
Citizens often think that the tax authorities are inflexible, but nothing could be further from the truth.
- Personal Income Tax (IRPF): If the tax return results in a payment due and the standard installment plan is not sufficient, you can request an ordinary installment plan of 12 to 24 months.
- Inheritance and Gift Tax: This is the prime example in Mallorca. Inheriting assets without having the cash to pay the tax makes deferral vital to avoid selling the inheritance at a loss.
- ITP (Property Transfer Tax): Common when buying a second-hand home or vehicle.
Self-employed and entrepreneurs
The self-employed individual is liable with their personal assets. Managing their time is crucial to protecting their privacy.
- VAT and Income Tax: If your customers haven't paid, charging VAT upfront can be disastrous. Installment payments align your payments with your actual receipts.
Legal Entities (Limited Liability Companies and Public Limited Companies)
Companies have strict obligations where planning is key.
- Corporate Income Tax (CIT): Deferring this payment allows you to reinvest the money in daily operations and pay it back in installments.
- VAT on large volumes: Essential to avoid blocking the company's bank accounts, which would paralyze payroll and payments to suppliers.
The common key: The €50,000 limit
This is the "golden rule" in the Balearic Islands. It is not necessary to provide guarantees (guarantees) if the total accumulated debt is less than €50,000.
- If you are an individual: Facilitates a quick process in Income Tax or Inheritance without notary fees.
- If you are a business: Streamline your quarterly cash flow management without pledging balances or asking for favors from the bank.
If you exceed €50,000, you must demonstrate future payment capacity and provide guarantees (bank guarantee, surety insurance or unilateral mortgage).
What you can NEVER postpone (Attention Businesses and the Self-Employed)
There's a red line the Tax Agency won't allow you to cross: Withholding taxes cannot be postponed. Forms 111 (for employees) and 115 (for rental income) must be paid immediately. The Tax Agency considers that this money was never yours, but rather that you withheld it from a third party on behalf of the State. Spending that money usually leads to an automatic denial of the deferral request.
The cost of peace of mind with the tax authorities
Financing through the Spanish Tax Agency (AEAT) involves paying late payment interest, but it has strategic advantages:
- For an individual, it is usually cheaper than a personal loan.
- For a company, it is a line of credit that does not consume CIRBE (bank risk), keeping your credit lines free for other investments.
At Resitax we analyze your viability and the deferral of tax debts in Mallorca
Whether you're a limited liability company administrator or an individual facing unexpected liquidation, bureaucracy shouldn't hold you back. A poorly filed application can lead to asset seizures. At Resitax, we prepare your file, justify your lack of liquidity, and negotiate the timeline you need.
Your tax peace of mind starts here. Don't hesitate to contact us today.