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Corporate taxation is divided into two categories: tax returns, related to the company’s activity, and payroll cost returns which are related to the staff. Tax returns are required if your company was created in Spain. You can see below that fiscal management in Spain works differently than in some other European countries.

What is a Tax Return?

Pour le trésor public, une activité économique consiste en toute action avec laquelle des moyens matériels ou personnels de l’association sont utilisées dans le but d’intervenir dans la distribution de biens ou services. C'est-à-dire que chaque fois que notre entité (l’entreprise) organise par elle-même une activité qui permet de vendre quelque chose ou de prêter un service, et que l’entreprise touche de l’argent pour cela, elle réalise une activité économique. Dans ce cas, l’entreprise devra s’assurer que sa gestion fiscale est en règle.

Spanish Tax Returns: how to do them?

At present, all tax management within Spanish companies must be made through the Internet on the Spanish tax authorities’ (Agencia Tributaria) website. Once the specified time period has finished, the forms should be sent even if no payment is in fact due. Current tax statements are generally carried out by the accounting services within a company. To complete this process, you should know the principles and rules applying to taxation inside out as well as knowing which documents to complete. You could also use the help of an on-sie accounting firm that can handle the accounting books and all your tax returns for you. Tax returns for companies include several taxes that are withheld by the tax authorities. You should know that business tax, annual flat-rate tax and apprenticeship tax do not exist in Spain.

Personal Tax Returns on Income

In Spain, income tax is deducted at the source of income itself. In other words, the company pays the employee’s income tax through deducting it from their gross pay every quarter.

VAT Returns

In Spain, the Value Added Tax is commonly known as IVA Impuesto al Valor Añadido. Spanish IVA is charged at the time of purchasing a product. There are three different VAT rates: the general rate, the reduced rate and the super reduced rate.

Annual Declaration of Income Tax

For company taxes, the Spanish tax system also proves to be very advantageous. Corporate tax in Spain ranges between 15% and 30%.