\ Social income is increased by 15% and measures are adopted to favour renewable energy installations.
The Consell de Govern has approved this Wednesday, in extraordinary session, the Decree-Law of extraordinary and urgent measures to alleviate the economic and social crisis caused by the effects of the war that began after Russia’s invasion of Ukraine, within the shock plan of the Balearic Islands that complements the measures of the Government of Spain.
Mainly, the Decree-Law includes humanitarian actions, tax measures for citizens and affected business sectors, social aid and aid to alleviate energy poverty, the review of public contracts to compensate companies for price increases, measures to accelerate the energy transition and promote renewable energy installations, the streamlining and simplification of all procedures for granting subsidies and aid agreed at the Social Dialogue Table and also to streamline recruitment processes in the civil service.
Across the board, the Government is speeding up the granting of public subsidies by simplifying and reducing the processing times to around 15 days to facilitate the effectiveness of the Balearic Islands administrations’ lines of aid to all sectors receiving aid to deal with the impact of the war in Ukraine, as was already done to speed up subsidies to deal with COVID-19.
Thus, a very simplified procedure for drawing up and approving the regulatory bases for the subsidies has been reintroduced, allowing it to be unified at the same time as the approval of the calls for proposals, in order to reduce the usual time required for these procedures (up to now they have taken a minimum of four months) to around 15 days. In addition, it will allow for the advance payment of aid and the simplification of the corresponding justification.
Measures for the most vulnerable families
Within the complementary social measures promoted by the Government of the Balearic Islands to alleviate the consequences of the war in Ukraine on the most vulnerable population, the decree approved today establishes three specific lines promoted by the Ministry of Social Affairs and Sports.
Firstly, the amount of the Guaranteed Social Income will be increased by 15% for three months. An extraordinary amount of 1.1 million euros will be allocated, which will benefit 4,400 families. For example, during these three months, a single person receiving Social Income will go from 491 euros to 565.74 euros more; an adult and a minor, from 747 to 859.11 euros more; and two adults and two minors, from 934 euros to 1,074.14 euros more.
Likewise, an extraordinary allocation will be made available to social entities for aid aimed at families in a situation of economic vulnerability who cannot pay their electricity and gas bills.
Thirdly, the allocation to social organisations that distribute food will be increased so that there are no supply problems for the families to whom they provide the service.
Care and reception of refugees
The Decree also includes the new personal income tax deductions to alleviate the effects of the war in Ukraine on people, which will be applicable in the 2022 tax year.
Thus, a deduction is established for the reception of displaced persons from Ukraine of up to 600 euros per taxpayer and 150 euros per person received, provided that the period of reception is longer than three months and does not involve relatives up to the second degree; and another deduction, of up to 150 euros, of 50% of the value of donations to non-profit organisations that are used for activities and programmes to alleviate the effects on people generated by the Russian invasion of Ukraine.
The decree, in order to address the humanitarian emergency situation, makes it possible to call for emergency financial aid for people affected by the conflict, as well as for social entities that offer shelter in collective accommodation spaces.
On the other hand, to facilitate access to public transport, the Transport Consortium of Mallorca will give displaced persons from conflict zones residing on the island the right to travel free of charge on the network of regular interurban road and train transport services in Mallorca, after issuing an intermodal card and registering in the system. All refugees will have this option for as long as they are considered as such.
Tax measures to extend the scope of regional personal income tax deductions
The Decree-Law incorporates a package of tax measures designed to alleviate the effects of the energy crisis on the people and various business sectors most affected, as well as to deal with the consequences of the humanitarian emergency created by Russia’s military invasion of Ukraine, which has led to a massive influx of people affected by the conflict and their reception in other countries. It also includes a reduced tax to encourage the purchase of electric and water-powered vehicles, as part of the energy measures.
Among the tax measures, the Decree-Law updates and increases the income limits to be able to benefit from regional personal income tax deductions. Thus, the limits of the taxable base of current deductions are increased by 10%. This measure can already be applied in the 2022 tax year.
Among others, these include deductions for school expenses for children up to the age of 6; for studying higher education outside the island of habitual residence; for renting a habitual residence for various groups (under 36 years of age, people with disabilities and large families, this year extended to single-parent families with two or more children or with a disabled child); for investments in the sustainability of the main residence; for the rental of housing resulting from temporary relocation for work reasons; for the purchase of textbooks; for learning foreign languages; or for donations related to cultural, scientific and technological development patronage.
Allowances for port taxes on fishing and the transport of goods.
The Decree-Law also provides tax benefits for certain port taxes of the Autonomous Community of the Balearic Islands, which affect professional fishing vessels and shipping companies of goods transport vessels, during the first half of 2022.
In the case of professional fishing vessels, they are exempted from the water and electricity supply tax and the storage tax. During the COVID-19 pandemic, these two taxes were reduced by 50%. The port tax, which relates to the proceeds from the sale of fish, is also reduced by 50%. This fee was not subsidised during the pandemic.
Likewise, a 50% reduction is also envisaged in the port tax for shipping companies for goods transport vessels providing a regular service to a port under the competence of the autonomous region.
Tax reductions on the purchase of electric and hybrid vehicles
In addition, other tax benefits are also incorporated in relation to electric and hybrid vehicles. In the tax on capital transfers and documented legal acts, a reduced rate is introduced for the purchase of these vehicles – a rate of 0% in the case of zero-emission vehicles and 2% in those classified as ECO vehicles. Consequently, a reduction of 50% and 25% respectively of the value of these vehicles is also applied to inheritance and gift tax.
Measures to promote renewable energy installations
In terms of energy, the Government considers that accelerating the energy transition is the best option in the medium and long term to stop depending on fossil fuels that come from abroad, victims of volatile prices and pollutants.
Thus, it is considered that the best way to structurally reduce the energy bill of citizens and our productive sectors is to take a series of regulatory measures that will not only improve access to renewables, but will also protect self-consumption as a right.
Therefore, this Decree-Law amends article 52 of Law 10/2019 on climate change and energy transition. With this modification, the Govern introduces the right to self-consumption of the citizens of the islands, that is, the right to produce and consume our own energy respecting the integration of these in patrimonial environments that will have to be delimited by the island councils.
Likewise, renewable installations are declared to be of regional interest with the modification of the fourth final provision, which introduces modifications to the Law on Climate Change and Energy Transition, in order to declare renewable energy generation projects as investments of regional interest, in order to reduce the time required to carry out the procedures for the installation of these renewable energies.
The aim is also to speed up the adaptation of grids for the implementation of renewable installations and reduce the execution periods for carrying out actions that require a declaration of public utility; all of this in order to make accelerated progress towards energy independence.
The aim is also to accelerate the adaptation of grids for the implementation of renewable installations and to reduce the execution periods for carrying out actions that require a declaration of public utility; all of this in order to make accelerated progress towards energy independence.
On the other hand, and with the aim of speeding up the administrative procedures for the penetration of renewables, amendments are introduced in Law 13/2012 on urgent measures for economic activation in the areas of industry and energy, new technologies, waste, water, other activities and tax measures, to accelerate the adaptation of grids and the implementation of renewable facilities and reduce the deadlines for issuing the necessary reports to carry out the actions that require a declaration of public utility.
Review of public contracts and concessions to compensate for price increases
On the other hand, by means of this Decree Law and two other agreements approved today, the Government has authorised several measures for the review of public contracts, in the face of rising prices, to compensate the administration’s contractors and ensure the economic balance of the contracts and services affected in cases where there has been an extraordinary and unforeseeable alteration – greater than 6% – in the prices of the materials that had been taken into account at the time the contract was formalised.
These measures extend to administrative and private contracts of the Administration of the Autonomous Community that have been executed or are being executed as of 1 January 2021 – only minor contracts are excluded – and will be applicable to the contracts of the island councils and town councils of the islands, without prejudice to local and island autonomy, and to the contracts of the autonomous public sector, provided that this is agreed by their competent bodies.
Likewise, in the field of transport, and in order to face the increase in fuel costs, from the entry into force of this Decree, the concessionaires of regular interurban passenger transport services by bus in Mallorca are granted the possibility of an exceptional revision of the price of the concession contract, which takes into account the increase in the cost of compressed natural gas consumption.
This exceptional price review will remain in force until a standard formula is approved for regular interurban passenger transport contracts by road with vehicles powered by internal combustion engines fuelled by compressed natural gas, and once the corresponding concessions have been modified. The extraordinary revision of the contract price will be carried out during its period of validity in each monthly settlement as of 1 March 2022.
Likewise, in housing, and in view of the increase in the prices of construction materials, aggravated during the first quarter of 2022, it is possible to update the maximum price modules for subsidised housing in order to recover the private promotion of subsidised housing. These prices had not been modified since 2008 and, given the increase in costs, made the construction of private subsidised housing unviable in many cases.
Standing Committee to simplify and streamline personnel selection processes
With regard to the civil service, the Decree-Law provides for the creation of a Permanent Commission for the selection and provision of personnel, attached to the Balearic School of Public Administration, with the aim of carrying out the selective processes for access to the civil service as career or interim civil servant personnel and to verify merits in the ordinary procedures for the provision of jobs in the public administration.
In short, this commission will make it possible to professionalise the tribunals in order to speed up the selective processes for access to the civil service and the processes for filling posts, as well as to face the stabilisation process with more guarantees in order to reduce the temporary nature of the civil service to below 5%.
Finally, it is foreseen to simplify the labour exchanges and the presentation and processing of applications, as well as the introduction of the responsible declaration to the assessment.