One of the most important taxes
which have to be paid by the local and the foreign investors who open companies in Spain
is the corporate tax
, that is applied on the federal level. There are also other less important taxes
that are levied by the regional authorities in this country, so a foreign entrepreneur should be aware on the requirements of these two levels of taxation
– at the federal and at the regional level.
Our team of lawyers in Spain
can offer in-depth advice on the corporate taxes
applicable to all commercial companies operating in this country; at the same time, businessmen can receive assistance on the manner in which such taxes
have to be paid.
Standard corporate tax in Spain
The good news for both local and foreign companies operating in Spain
is that the rate at which the corporate tax
is imposed on the company’s income decreased in 2015, from 30% to 28%, and a further decrease was applied in 2016, when the corporate tax
was established at 25%.
The rate was even higher in 2005 when it reached
35% and three years later it decreased to 30%. The decrease is a sign that the Spanish authorities
want to encourage the business environment in this country, that was strongly affected by the financial crisis. However, at the moment, numerous aspects show that the policies imposed by the local authorities had positive effects, including on the level of employment
is applied to all companies registered in Spain
and it is calculated on the net income obtained from the economic activity during a business year. The corporate tax
represents an important source of income for the public budget of the Spanish authorities
An important aspect related to the taxation of Spanish businesses
is that the newly registered companies may benefit from a lower corporate tax
(imposed at the rate of 15%), in the situation in which they were registered after 1st of January 2015. Our team of Spanish lawyers
can offer more details on other requirements available for this particular case.
Different rates for certain types of Spanish companies
The reduced rates applied for small companies
were eliminated starting with 2015, when the new rate came into force. The Spanish authorities
decided to allow a transitory period during 2015, when the corporate tax
for small and medium-sized companies was of 25%.
The investors are encouraged to open companies in Spain
because they will have to pay a reduced corporate tax
in the first two years in which they obtain a taxable profit
. As mentioned above, the reduced corporate tax
newly formed companies can be imposed at the rate of 15%, for a tax base below EUR 300,000
. The reduced tax
is available for the first two taxable years
of economic activity. Any amount above EUR 300,000 will be imposed with a corporate tax rate of 20%
(for the same period of time).
What are the basic categories of Spanish taxpayers?
The residents in Spain
must pay taxes
calculated on their income obtained at a global level and the persons who are non-Spanish residents
are taxed only for their income
gained in this country. The foreign citizens who don’t have the Spanish citizenship
, but who live in this country for minimum 183 days or have their main base of professional activities or economic interests in Spain
or have a spouse and children who live there, can be considered residents.
The tax residence
is necessary in order to prove that a foreign citizen can benefit from the double tax treaties
signed between Spain
and different other countries. They have to present a residence certificate that is valid for one year. The non-residents who obtain income in Spain
should pay the taxes
in this country and if there is a double tax treaty
signed between their country and Spain
, they have the possibility to choose the country where one will pay the taxes
Reduced rates starting 2015
One of the most important taxes
a company has to pay in Spain
is the corporate tax
that had a rate of 28% in 2015 and was reduced to 25% in 2016, from the 30% in 2014. These changes will encourage the foreign entrepreneurs to invest in Spain
in order to benefit from a reduced taxation
The reduced rates for small and medium-sized companies in Spain
were eliminated starting 2015, with certain exceptions, and these types of companies can benefit from the reduced basic rate of income tax
. The new companies are allowed to pay an income tax
of 15% calculated for the first two years in which they obtain a taxable profit
What are the basic corporate taxes in Spain?
refer to the ensemble of taxes
that have to be paid by companies operating in Spain
. Our Spanish lawyers
can present in-depth information on all the taxes
applicable to local businesses and can provide in-depth information on the tax compliance system
applicable in this country. Currently, the following taxes
- the corporate income tax, which is imposed at the standard rate of 25%;
- companies operating as branch offices are charged with the branch tax, currently imposed at a rate of 25%;
- companies can also be imposed with the capital gains tax, that can be charged at a rate of 25% or 0%;
- all companies in Spain that are liable to the payment of the corporate income tax have to submit their tax return in a period of maximum 6 months and 25 days after the end of the fiscal year;
- please be aware that taxes paid after the end of the prescribed tax return period will be charged with fines that can range between 50% and 150%, calculated from the value of the unpaid tax liability.
When an investor registers a local business, he or she should take all the necessary measures in order to register for taxation
purposes as well. One must also register for the payment of the corporate tax
, by submitting specific forms with the Spanish Tax Authority (Agencia Tributaria)
Investors must be aware of the fact that the Spanish corporate tax system
also includes the capital duty tax
and the payroll tax
. One should also take into consideration the real property tax
and the stamp duty. Additional taxes
may also apply and you may request legal advice on the Spanish tax system
from our team of lawyers in Spain
What types of entities are liable to paying the Spanish corporate tax?
A wide range of entities have to register and to pay the corporate tax in Spain. The amount due is determined based on the tax residency of the respective entity (Spanish based company or foreign based company, but which has its registered office in Spain or its effective management set up here).
Our Spanish law firm
can present the extensive list of entities that must be registered for paying this type of tax
and, below, investors can find some of the most common situations in which various structures have to pay this type of tax
- companies incorporated following the commercial legislation in Spain, such as limited liability companies, corporations or partnerships;
- government entities and associations, organizations, foundations and other similar structures, regardless if they are registered as private or public structures;
- sole traders must also pay this tax, as it is the case of economic interest groupings;
- certain categories of investment funds are liable as well, such as the guaranteed investment funds or the investment funds regulated by the Collective Investment Institutions Act;
- this applies to cooperatives and to European economic interest groupings.
What are the obligations for filing the corporate tax return in Spain?
Companies must file their corporate tax returns
as stipulated by the applicable accounting standards
. Provided that an entity, regardless of its type, is liable to the payment of this tax
, then, its representatives have to file the corporate tax returns
as per the applicable requirements.
According to the Spanish law
, a company liable to the corporate tax
has to file the tax returns
regardless if has obtained taxable income
in the respective tax period
or not. The Spanish Corporation Act
prescribes the obligations of the taxpayers
, but more details on this subject can also be obtained from our team of Spanish lawyers
However, there are specific exemptions from this basic rule, where taxpayers do not have to file tax returns, as long as they comply with the regulations stated by the Articles 9.1 and 9.3 of the Spanish Corporation Act (the latter Article refers to entities that have an income of maximum EUR 73,000 in a financial year).
The amount due that a company has to pay is calculated based on the provisions of the Corporate Income Tax Act, which stipulates that the basic computing method is established by the Spanish Generally Accepted Accounting Principles. The Act also provides the legal basis through which companies can benefit from deductions from the payment of this tax and they may obtained when investing in research and development activities, provided that certain conditions are met (the expenses and investments are made in Spain, in the European Union’s states or in the European Economic Area).
Investors who need to find out more about the corporate tax applicable in Spain
are invited to contact our law firm in Spain
. Our Spanish lawyers
will offer information about the taxation system
in this country and legal assistance for any other topic related to the economic activity of company registered here. Please address to our team of lawyers in Spain
for more information on how to register for the payment of the corporate income tax