Executive summary of the main general legal issues in 2021 and their consequences for companies
Ten key aspects
1. Recovery and Resilience Plan. It is advisable to analyze approaches to public-private partnership and the possibility of entering into business cluster agreements to submit applications for public tenders and financial aid.
2. Rebalancing of contracts. The rebus sic stantibus clause has been the main legal instrument to rebalance the disproportion in contracts affected by COVID-19, having been invoked in numerous court proceedings.
3. Corporate governance. Companies must take into account the new rules on related-party transactions for negotiating shareholder agreements, the possibility of regulating online board meetings in the bylaws, potential restrictions on dividend distribution and new boundaries regarding non-financial information.
4. Consumer contracts and relations. Companies that market retail products and services need to be aware of significant amendments affecting consumer contracts and relations that extend consumers’ rights and will soon come into force.
5. Climate change. Public procurement is likely to include technical specifications and awarding criteria related to reducing emissions and carbon footprint. Besides, listed companies, credit institutions and insurance undertakings face new reporting obligations that are yet to be defined by regulation.
6. Energy. A new renewable energy economic regime has been implemented establishing a complementary remuneration framework through auctions, and several tax mechanisms and measures have been enacted to mitigate the impact of rising prices.
7. Electronic administration. Companies must analyze whether the electronic certificates, representation and electronic notification systems they use are suitable to deal with the authorities.
8. Employment. Companies that implemented a temporary collective redundancy plan (ERTE) during the pandemic and still benefit from the facilitation measures for COVID-related ERTE must assess how they will be affected by issues such as the commitment to maintain jobs, training obligations and restrictions on dividend distribution.
Companies wishing to implement a remote working system must fulfill the obligations set out in the new regulations. They must also ensure compliance with equality obligations.
9. Tax. It is advisable to analyze the impact of the following:
- Tax measures approved in 2016 that affect the final amount of corporate income tax (CIT) payable and payments on account corresponding to CIT, to map out the best strategy in the event that Royal Decree-Law 3/2016 is declared unconstitutional, and consider the temporary effects of that Royal Decree-Law being declared unconstitutional.
- The recent Constitutional Court judgment on the unconstitutionality of the municipal capital gains tax and the urgent regulations approved to amend these rules, to adopt the most appropriate measures if so required.
For fiscal years starting from 2021, CIT exemption for dividends and income from transferring qualifying shares will drop from 100% to 95%. That is, 5% of the amount of these revenues will remain in the taxpayer's tax base, without the rule providing for any exceptions for commercial or tax groups.
Finally, companies, particularly those engaged in intense crossborder activities or belonging to multinational groups, must ensure that their internal organization complies with the DAC 6 hallmarks.
10. International personal data transfers. Companies must analyze their crossborder data flows to adapt to the obligations set out in the new standard contractual clauses and update their international transfer protocols.