Corporate Tax Advice in Spain

When there is more than one country involved, tax planning requires a level of expertise that few professionals can offer. Many of our clients pay personal taxes and business taxes in a foreign country, as well as personal and business taxes in Spain. In Spain, the corporate income tax rate is 35%.  Companies with yearly sales of less than 8 million euros may qualify for certain tax incentives:

  • A tax rate of 25%, applicable to the first 120,000€ of taxable income.
  • Accelerated depreciation of certain fixed assets.
  • A 10% tax credit for investments and expenses in internet, information technology, and communications.

 

VAT Tax (IVA): National

The purpose of VAT is as a tax on end-consumers; businesses are generally entitled to deduct VAT borne against VAT charged.

Tax on Business Activity (IAE): Local

This is an annual tax which is waived for any business with profits of less than one million euros. It is an annual tax paid by businesses operating in the municipality. This tax rate depends on many factors, such as size and location of the business, the type of business and number of employees.