Taxes in Spain
- Taxpayer Advocacy and Representation before the AEAT
- Directors' taxation
- Partnership taxation
- VAT
- Capital gains tax
- Income tax
- Full tax consulting of the company in all aspects.
- Fulfillment of all national tax declarations along the year: quarterly VAT
declarations, summarised annual VAT form, quarterly Income Tax retention (IRPF)
for employees, summarised annual Income tax retention for employees, Corporate
Tax, etc.
- Full consulting and fulfillment of local tax obligations.
- Officials communications with State Tax Authorities.
- Fulfillment of the Administrator’s annual Income Tax Declaration.
- Tax Inspections: Representation and defense of the company in any possible tax
inspection that may arise from the State Tax Bureau, Regional and/or local
authorities.
The
most important appointment is at the end of the financial
year (after the third quarter), planning to ensure the
year's result is the desired one. There is
no much to do after the financial
year is over
There may be different ways we can offer the
accounting services:
- Email us or post us all the
receipts (invoices, bank statements, etc).
- Enter receipts data in a
quite simple accounting software, and email us
monthly an exported file.
- We report quarterly by email a profit and loss account,
and an interim balanced sheet.
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There are three levels of tax authority: the State (national); "Comunidad
Autonoma" (regional); and Towns (local).
All residents (both individuals and corporate bodies) must pay taxes on all of
their worldwide income. Non-residents are subject to taxation only on incomes
earned or paid on Spanish territory.
The Spanish taxation system classifies tax payments as Taxes, Levies and
Contributions.
The main direct taxes applicable in Spain are:
- Corporate income tax
- Personal income tax
- Non-resident income tax
The main indirect taxes applicable in Spain are:
- Value added tax (VAT)
- Transfer and stamp tax
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Resident legal entities must pay tax taking into account all of their
worldwide income. Non-residents are subject to taxation for this tax solely for
the income accrued or paid on Spanish territory.
In general accounting principles coincide with corporate tax principles, very
little non-accounting adjustments must be made.
There are two rates: general 35% and 30% for small size companies.
Calculation: Incomes - Expenses = Profit Before Taxes
Profit Before Taxes x 35% / 30% = Net Profit
There is a system of tax incentives for small-sized enterprises, exclusively
applicable to companies whose net turnover in the tax period immediately prior
thereto is less than 8 million euros:
- A tax rate of 30%, applicable to the first 120,000 euros of taxable income
- Accelerated depreciation if the asset unit value does not exceed 601.01 euros.
- Deduction in repayment of 10% of the investments or expenses: Access to
Internet, Presence on Internet, E-commerce...
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Individuals shall be deemed to have their principal residence in Spain if
they meet any of the following conditions: They spend more than 183 days per
calendar year in Spain or or when the core of their economic interests lies in
Spain.
A body corporate shall be deemed to be a resident of Spain if it meets any of
the following conditions: It was incorporated in accordance with Spanish law, it
has its registered office in Spain, it has its effective headquarters in Spain.
A body corporate shall be deemed to have its effective headquarters in Spain if
management and overall control of its activities are based in Spain.
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When, by any legal means, a non-resident has continuous or habitual work
facilities in Spain or a place to do any kind of work where he/she/it performs
all or part of his/her/its activity, or when he/she/it acts in Spain through an
agent with powers to enter into an agreement in the name
and on behalf of the non-resident individual or body corporate, provided said
powers are exercised on a regular basis, it shall be considered that the
non-resident is acting in Spain through a PE.
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Generally Non-residents’ tax contributions in Spain are lower if they use a
PE in Spain. Also generally speaking branch and PE are equivalent concepts.
Non-residents that obtain income through an PE in Spain shall be taxed for the
total amount of income attributable to said PE, regardless of where it was
obtained.
The tax base of the PE is calculated in accordance with the provisions on the
general system of the Corporate Taxation Act (Ley del Impuesto sobre
Sociedades, LIS). General tax rate 35%
Income not obtained through a permanent establishment (EP): In general, the
tax base shall be the gross tax base due, i.e. without deduction of any
expenses, and tax rate general applicable is 25%. (aeat.es)
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Payroll - hiring in Spain
Our firm offers complete payroll preparation and payroll tax reporting
services. We prepare all returns and offer full magnetic media and electronic
filing capabilities.
- Full laboral consulting.
- Fulfilment of all salary form and Social Security form.
- Laboural Inspections: Representation and defense of the company in any
possible laboural inspection that may arise from the State Laboural Court,
Regional and/or local authorities.
- Assistance on the legal systems of Laboural Risk Prevention.
- Advisement and fulfillment of any application form for retirement salary.
- Advisement on Subventions for employees contracting.
- Paycheck Processing
- Quarterly & Year-end Payroll Tax Filing
Bare in mind in Spain wages are paid monthly.
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