Dear clients,

In the midst of the sanitary crisis that stems from COVID-19 and of the economical crisis that will follow, and in a moment in which Andorra is currently “on hold”, our Government has formulated various mesures in order to limit the harmful effects that this situation will cause to the economy of the country.

These measures aim at protecting all socio-economical aspects that are fundamental to maintain our social wellbeing and they have been included in the Omnibus Law, which has been approved by the Andorran Parliament (Consell General) on 23 March 2020.

The Omnibus Law will be published shortly within the Official Bulletin of the Principality of Andorra (BOPA) – moment at which the Law will enter into force- with measures that will last a maximum of 2 months and among which:

    1. Measures in the labor realm:
      • Companies that are touched by the obligation to suspend their activity or that have voluntarily suspended theirs:
        • Have the obligation to pay 100% of the fix wage agreed upon.
        • Cannot invoke the suspension of the labour contracts due to an event of force majeure.
        • The duration of the suspension of the activity is taken into consideration with respect to the right to holidays and antiquity in the company.
        • 50% of the hours during which the employee has not worked are paid under the figure of the “retributed permit” (permís retribuït).

      • In order to limit the economical effects of the above mentioned obligations the following measures have been approved:
        • Compensate the other 50% of the hours during which the employee has not worked but that are nevertheless paid by the company with work performed by the employee pursuant to the following mechanism and in the following order:

          1st – Compensation with extraordinary hours and work on festive days established by the labour calendar that have already been performed within the conditions set out at article 55 of Law 31/2018 on Labour Relations, without the need of any agreement between the parties or the consent of the employee.

          2nd – When the previous modalities are insufficient, there is a compensation with future extraordinary hours and work on festive days established by the labour calendar, agreed upon in writing (submitted to certain requirements and conditions), with no increase contemplated at article 58.2 of Law 31/2018 on Labour Relations.


          3rd – Compensation with holidays of the employee up to 50% of the annual holidays.  If the holidays that are left are below 21 natural days or 16 working days, the employee can choose between taking further days of holidays that will be deducted from its holidays generated in 2021 or taking further days of holidays that are not paid by the company.


          4th – If the previous modalities are not sufficient to compensate the debt of hours of the employee, the company can, with no obligation to negotiate, apply an hourly compensation on future work to be performed (submitted to requirements and conditions), with no increase contemplated by article 58.2 of Law 31/2018 on Labour Relations.

        • The hours of work that are not performed by employees pertaining to sectors that have not been afected by the compulsory suspension, who have children under 14 years old and/or with discapacities and who are obliged to remain at home to take care of their children, will be compensated by the Government pursuant to measures that will be adopted by Regulation.

    2. Additionally, other measures aim at preserving the sustainability of companies:
      • Until the date on which the Government declares the termination of the situation of sanitary emergency and during the 14 natural days following said declaration, the prior notice that must be given to modify the working hours set out at articles 54, 55 and 59 of Law 31/2018 on Labour Relations does not apply.

      • The company can modify/change the functions of the employee without any change regarding the wage paid to the employee.

      • Possible reduction of the quote of those conducting an activity on their on behalf (per compte propi) due to a significant reduction of the economical activity. This request will be done on-line (http://www.cass.ad) and will be available as of the date of publication of the Law at the BOPA. The digital certificate will not be required and several data will be requested to correctly identify the user.

      • Possibile temporal suspension of the quote during the suspension of the economical activity. This request will be done on-line (http://www.cass.ad) and will be available as of the date of publication of the Law at the BOPA. The digital certificate will not be required and several data will be requested to correctly identify the user.

      • Financing of the quote to be born by the company with respect to the wages paid for  companies that have suspended their activity. This request will be done on-line (http://www.cass.ad) and will be available as of the date of publication of the Law at the BOPA. The digital certificate will not be required and several data will be requested to correctly identify the user.

      • Financing of the operating costs of companies pursuant to loans guaranteed by the Government (see Decree 24 March 2020 on the approval of an extraordinary program of guarantees for companies during the situation of sanitary emergency caused by coronavirus SARS-CoV-2).

      • Reduction of the rent of business premises as follows:

– 100% reduction for businesses that have completely suspended their activity.

– 80% reduction for businesses  that have suspended their activity but maintain a guard service.

– 50% reduction for businesses that must remain open.

      • Postponement and fractioning of tax obligations for all of those that cannot face the payment, upon request:

– Even if the tax obligation corresponds to retentions, account payments or sanctions.

– The postponement and/or fractioning will not generate any interest for late payment.

– A new time frame for the payment of the tax on economical activities (Taxa sobre el Registre de Titulars d’Activitats Econòmiques) beyond the date of 30/06/2020.

– Account payment of the corporate tax for the periods between 01/01/2020 and 31/05/2020, limited to 20% of the quote of liquidation of the previous exercise (instead of 50%).

– Fractioned payment of the income tax for the period started on 01/01/2020, limited to 20% of the quote of liquidation of the previous year.

–  If business premises are owned, there is a reduction of the taxable basis of the indirect tax (IGI), the corporate tax (IS), the income tax of non residents and of residents (IRNR and IRPF) with respect to the rents that are not obtained.

 

IMPORTANT OBSERVATION:

In order to protect the employees, the grant of public financial assistance is conditioned to the preservation of the labour contracts by the company. The companies that have fired employees as of 14/03/2020, unless these are disciplinary or correspond to a seasonal contract that terminates before 01/05/2020, will not be able to benefet from said public financial assistance.


For any further information, please contact us through our web site.