Operating a business in any jurisdiction will give rise to tax liabilities. At E&G Solicitors in Spain we are able to guide you through Spain’s complex tax system and help you to recognise, and lawfully minimise, your tax liabilities.
There are three different types of taxes associated with running a business in Spain. These are Corporate Income Tax (known in Spain as Impuesto de Sociedades), VAT (known in Spain as IVA) and a local business tax.
Our accountants can offer you a complete accounting and payroll service to accommodate your business. The comprehensive tax advice we offer will assist you in making the right financial business decisions, safe in the knowledge that you are paying the correct amount of tax due to the authorities. We can also assist you with your VAT bill and understanding how you may lawfully minimise your tax burden.
Corporate income tax
Corporate income tax is a national tax which is set at a rate of 15% for new companies for the years 2015 and 2016. Companies that are not new but have a profit of less than €5,000,000 (five million Euros) will be charged corporation tax at a rate of 25% for 2015 and 2016. Companies that have profits of more than €5,000,000 (five million Euros) will be charged corporation tax at a rate of 28% for 2015 and 25% 2016.
As in the UK, VAT in Spain is payable by the end customer of goods and services. Companies registered for VAT are entitled to deduct their input VAT against output VAT – that is VAT charged by them. The current rate of VAT in Spain is 21%. It should also be noted that if you are buying a new apartment directly from a developer you will be charged VAT on the purchase at a rate of 10%.
Local business tax
Businesses which have a profit of over €1,000,000 (one million Euros) will also be expected to pay an annual local tax, in addition to the taxes already mentioned above. The rate at which tax is payable depends on the size, location, number of employees and purpose of the business.
Failure to pay your business tax liabilities can have serious consequences for you and your company. To ensure that you are aware of all your tax liabilities it will be essential for you to seek independent legal and financial advice.
If you purchase a property in Spain, you will be liable to pay some form of tax on that property. In Spain this tax is payable on a property purchase at varying rates, depending upon where the property is situated. E&G Solicitors in Spain can assist you in assessing your business’ tax liability, whether you are purchasing from, or as a limited company.