Today, more and more people are coming to live in Spain, particularly young adults who intend to take advantage of not only the good life here in Spain but also to start up economic business activity. However, before launching any sort of business project, it is important to know all about the different taxes in Spain as a host country.
En Espagne, le système de taxation espagnol s'exécute sur trois niveaux : national, régional et local.
Everyone who undertakes some sort of commercial activity on Spanish soil must send a tax return to the tax office. 3 types of tax statements exist:
If you start your own company in Spain, the company will then be subject to corporate income tax (Impuesto de Sociedades EI). This tax is levied on any Spanish company. The Spanish government wants to encourage foreign companies to do business in Spain and it is for this reason that recent legislation regarding corporate tax has undergone changes to render the organisation simpler. The tax threshold for resident companies is 30%. For small businesses, a reduced tax rate of 25% applies to their taxable income under 300,000 Euros. Any profit above this is taxed at the standard rate of 30%. However, in order for this to be accepted, companies must have a turnover of less than 10 million Euros.
For the tax years of 2011, 2012 and 2013, small businesses with fewer than 25 employees and with a turnover of less than 5 million Euros a year that maintains or creates jobs, are taxed at a rate of 25% for the first 300,000 Euros of earnings and 30% on the rest.
From 1 January 2013, newly established companies benefit from a new corporate income tax at a reduced rate for their first year in which the company makes a profit.
The Impuesto sobre Actividades Económicas IAE is a direct and obligatory tax made payable annually and managed by the city council. The base sum is constant regardless of the scale of economic activity within a company.
Individuals themselves are exempt from this tax. The same goes for companies whose net turnover is less than 1 million Euros and for those that started business in Spain during the first two tax years.
The amount of tax due is based upon several factors such as the type of business, the area occupied by the company, the net amount of sales etc. The minimum rates are published by the government and can be altered by each municipality.
Value-Added Tax (IVA Impuesto sobre el Valor añadido) is a tax which is the backbone of indirect taxation within the Spanish system. It takes into account three types of transactions: