Corporate tax

A company or organisation is considered to be resident in Spain when one of the following requirements are satisfied:

• The company was constituted according to Spanish law.
• The company’s registered address is in Spanish territory.
• The company’s effective headquarters are based in Spanish territory.

Those organisations that do not satisfy any of the three foregoing requirements are considered to be non-resident.

The Taxation Office designates an organisation based in a tax-free country or territory as resident in Spain when:

• its main assets, directly or indirectly, consist of assets located or rights that are fulfilled or exercised in Spain; or
• its main activity is carried out therein, unless it proves that its direction and effective management take place in that country or territory, and that its incorporation and operations have a valid economic motive and substantive business reason other than the simple management of securities or other assets

Companies will pay Corporate Tax on profits at a rate of 30%. The tax rate is reduced to 20-25% up to 300,000 euros and thereafter 30% for small companies.

Accounting periods are the basis periods for corporation tax. Your first accounting period begins when your company or limited liability partnership starts operating. Accounting periods don’t have to be the calendar year but they must not be longer than 12 months..

Under certain circumstances there is accelerated depreciation of new assets. Under certain conditions there are applicable deductions for, amongst others, communications and investments in technology.

Value Added Tax (IVA): This tax is applicable when buying from a promoter, developer or habitual trader. The rates are; 16%, 7% and 4%. VAT of 16% is applicable to most sales of goods and services, and specifically when purchasing plots of land or garage spaces.VAT of 7% is applied to sales of new, private houses.

Services provides by andalucia-lawyers.com

• Obtaining a tax ID number for the business.
• Registering the company for business activities tax.
• Registering the company for VAT purposes.
• Applications for the refund of VAT.
• Representation on Appeals at Court for VAT matters.