In Spain, all companies, resident or non-resident, pay a company tax called “Impuesto de Sociedades“. The only exception is the self-employed. A freelancer’s company tax is included in his/her personal taxes, called IRPF: Impuesto sobre la Renta de las Personas Físicas (personal income tax return).
The standard tax is 30%, but Small and medium-sized enterprises (SMEs) (In Spain: companies earning less than 10 million euros per year) only pay 25% for the first 300,000€ and 30% for the rest. SMEs in Spain are called “Pymes”.
This percentage is calculated considering all revenues and includes capital gains less authorized expenses and VAT.
Worldwide profits are taken into account for companies resident in Spain, while non-resident companies only count the money from profits generated in Spain.
This tax is paid on three occasions every year: April, October and December. Also, an annual corporate tax return must be filed seven months before the end of the tax year.
This is the main tax, but there are some more business taxes in Spain.
Tax on business activity
If your company makes more than one million euros annually, then you will need to pay the tax on business activity or “Impuesto de Actividades Económicas” (IAE). If doesn’t, you need to fill out a discharge statement.
In order to determine whether you earn this million euros, income is added and taxes are subtracted. Financial income and subsidies are not considered (unless they are granted for the units of product sold). Only income that forms part of the ordinary activity is considered, so if money is obtained or lost by moving the headquarters of the company, for example, it would not be taken into account.
In Spain, this tax is paid at the beginning of the calendar year, so at the beginning of 2019 you will have to consider 2017 income.
This tax is not paid for the first two years.
Other business taxes in Spain: VAT, Social Security, etc.
These are the basic business taxes in Spain, but there are more. There is also a VAT, called IVA (Impuesto sobre el Valor Añadido), but it is not paid by you, it is paid by the clients. You act as an intermediary and you have to deposit it every three months. It is a surcharge that is applied to your products between the 4 and the 21%.
Of course, you have to pay a Social Security tax for each employee and, depending on the activity and particularities of each company you have to pay or not other taxes, such as taxes on for vehicles or real estate.
You can have all the information you need in the Spanish Tax Office
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