Business Taxes in Spain

Business Taxes in Spain

Company Tax or Corporate Income Tax for Business Taxes in Spain

This is a national business or corporate income tax in Spain on all types of Spanish companies (as well as nonresident companies in Spain) except the Sole Trader (Autónomo). (Sole Traders report their business and personal income together on their IRPF instead.) The standard Company Tax rate is 30%, but small and medium companies (PYMEs), who are defined as having a net turnover of less than three million euros each year, are only taxed at 25% on the first 120,202 euros earned and at 30% for income above that figure.

Spanish companies are taxed on their worldwide income. Nonresident companies in Spain, however, are only taxed on their Spanish income. In Spain business income for tax purposes is defined as all business revenue and includes all capital gains (though a capital gains tax credit may be available), less expenses and VAT payments.

The Company Tax return should be filed with the national Spanish tax authorities, the Agencia Estatal de Administración Tributaria, no more than six months and twenty-five days from the end of the company’s fiscal year. Businesses with an annual turnover of more than six million euros should also pay three advance tax payment installments in April, October, and December.

VAT in Spain

IVA, Impuesto Sobre el Valor Añadido: This isn’t a tax on you but on your customers, and more specifically, on the purchases that your customers make for your goods and services. The VAT rate ranges from 4% to 16%. However, as a business, you’re the middleman who has to collect the VAT and hand it over to the Spanish government via the Agencia Estatal de Administración Tributaria. All businesses must file quarterly VAT statements and pay the corresponding amounts.

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