A Guide to Tax for businesses in Spain

Purchasing property in Spain can seem overwhelming.

Running a business in any country involves tax obligations. Your Spanish Solicitor can guide you through Spain’s intricate tax system, helping you identify and legally minimise your tax liabilities.

There are three main types of taxes for businesses in Spain: Corporate Income Tax (Impuesto de Sociedades), VAT (IVA), and a local business tax.

Our accountants provide comprehensive accounting and payroll services tailored to your business needs. Our detailed tax advice will help you make informed financial decisions, ensuring you pay the correct amount of tax to the authorities. We can also assist with your VAT obligations and advise on lawful ways to reduce your tax burden.

Corporate Income Tax

Corporate income tax is a national tax. For new companies, the rate was set at 15% for the years 2015 and 2016. Existing companies with profits under €5,000,000 were taxed at 25% for 2015 and 2016. Companies with profits exceeding €5,000,000 were taxed at 28% in 2015 and 25% in 2016.

VAT

In Spain, as in the UK, VAT is paid by the end consumer of goods and services. Companies registered for VAT can deduct their input VAT from their output VAT. The current VAT rate in Spain is 21%. Additionally, if you purchase a new apartment directly from a developer, VAT will be charged at a rate of 10%.

Local Business Tax

Businesses with profits exceeding €1,000,000 are required to pay an annual local tax in addition to other taxes. The rate of this tax depends on factors such as the size, location, number of employees, and the nature of the business.

Property Tax

When purchasing property in Spain, you will be liable for property tax, which varies depending on the location of the property. Your Spanish Solicitor can help you assess your business’s tax liability, whether you are purchasing as an individual or a limited company.

Importance of Compliance

Failing to meet your business tax obligations can have serious repercussions. It is crucial to seek independent legal and financial advice to ensure you are fully aware of all your tax liabilities.