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Spain

Financial Year – 1 January – 31 December
Currency – Euro

Corporate Tax Summary

Residence – A company is considered to be a resident in Spain if it complies with one of these requirements:

  • Creation under Spanish law
  • With an address in Spain
  • Its management address or control centre of activities are in Spain.

Basis of Taxation – Resident companies are taxed on worldwide income. A non-resident company generally pays taxes only on income derived from Spanish sources. The tax rates and treatment are the same for companies and branches of foreign companies. Documentation obligations of related operations

1. Definition of related persons or entities

a) An entity and its partners (natural or legal entities), with a minimum direct or indirect participation of at least 25% of the capital.
b) An entity and its administrators, except for their remuneration as directors.
c) The relatives of the partners or administrators up to the third degree of kinship.
d) Two entities in which the same partners or their relatives up to the third degree, participate, directly or indirectly, in at least 25 per cent of the share capital.
e) Two entities belonging to the same group.
f) One entity and the directors of another entity, when both entities belong to the same group.
g) An entity resident in Spanish territory and its permanent establishments abroad.
h) Entities resident in tax havens (even if they are not related) (they have the same treatment and documentation obligations).

2. Formal Transfer Pricing Obligations

2.1. Documentation of Related Operations (master and localfile)

Individual companies (Countryfile or localfile):

a) Standardized Document (basic): for companies of Reduced Size (turnover of the previous fiscal year < 10 million euros). b. Simplified content documentation: for companies whose individual or joint turnover in their group is between 10 and 45 million euros. c. Specific Taxpayer Documentation: for companies whose individual or joint turnover of their group is > 45 million euros.

Additional documentation for Groups of companies:

a. Group documentation (Masterfile): for groups of companies with a joint turnover of > 45 million euros.

Local and masterfile preparation deadlines: 6 months and 25 days after the end of the fiscal year. There is no obligation to file it, if required, the delivery time is 10 days.

2.2. Exceptions:

Documentation will not be required, in general:

a) To transactions carried out between entities of the same „tax consolidation group“;
b) To transactions carried out with related entities, when the aggregate amount of the transactions does not exceed 250,000 euros at market value.

2.3 Informative statements:

a) Model 231: Information Statement. (CbCr – Country by Country Report) for groups of companies with a combined turnover of > 750 MM (Model 231). Presentation period: 12 months after the end of said tax period.
b) Form 232: Information return on related-party transactions and transactions and situations related to countries or territories classified as tax havens. Presentation period: 11 months after the end of said tax period.

Reference
Corporate Income Tax Rate (%) 25% 25% general rate, 15% entities of new creation (under restricted conditions, non groups, e.g.) during the first two years with corporate profit.
Branch Tax Rate (%) 25% 25% general rate.
Withholding Tax Rate:
Dividends – Franked 19% – 23% Individual shareholder
Dividends – Unfranked 0% Corporate shareholder.
Dividends – Conduit Foreign Income N/A N/A
Interest 19% 19% Individual lender. Foreign company: According to DTC between countries
Royalties from Intellectual Property 10% According to DTC between countries
Fund Payments from Managed Investment Trusts
Branch Remittance Tax 0% According to DTC between countries
Net Operating Losses (Years)
Carry back N/A
Carry forward Indefinite

Individual Tax Summary

Residence – For tax purposes an individual is a resident if he/she ordinarily “resides” in Spain or meets one of the following requirements:
1ª Has spent more than half a year (183 days) in Spain

2ª Has allocated in Spain his/her main activity or economic interests (directly or indirectly)

3º Has allocated in Spain his/her personal interests (family, son, daugther, …)

Basis of Taxation – Resident taxpayers are generally taxed on worldwide income, with a tax offset for foreign tax paid on foreign income, up to the amount of Spain tax payable on that income. The special system for workers posted is taxable at a fixed rate, 24% up to the first €600.000 incomes and 45% for the rest of the incomes for 6 years.

Filing Status – Each taxpayer must file a separate return each calendar year; joint returns are permitted with some limitations.

Personal Income Tax Rates

Taxable Income Tax Payable – Residents Tax Payable – Non Residents
0 up to 12.450 €uros 19%
12.450 up to 20.200 €uros 24%
20.200 up to 35.200€uros 30%
35.200 up to 60.000 €uros 37%
60.000 up to … 45%

According to where individuals reside taxable incomes is reduced according to his/her personal circumstances with a minimun of €5.500. Foreign residents are taxable only on the income made in Spain.

Real Estate property pay 2% (1.1% in some situations) of cadastral value.

Profit for Real Estate pay 24% (19% EU)

Transfer of Real Estate 19%

Goods and Services Tax (GST)

Rate 21%
Taxable Transactions VAT is the value added tax on the goods and services in Spain. There are three different rates of VAT: 21% is the standard tax rate, 10% for specific products and services and 4% for essential goods. Not all transactions are taxable, there are some which are exempt from the IVA/VAT such as exports and transactions with EU countries with certain criteria.
If the result of the operations during a year is a tax credit at the end of the year, the tax payer can request this amount.
Registration The registration is mandatory for the individual and companies who perform operations that are VAT taxable. Additionally, to be able to avail of the exemptions for intra-community operations it is compulsory to register as an IC operator within the EU.
Filing and Payment The submission and payment is generally quarterly; however, there are two conditions that require a monthly submission, these are:
– Companies with an annual turnover higher than €6.000.000
– Companies that wish to request their VAT credit monthly if there are more VAT to claim than to pay.
These last two conditions also require the submission of what is known as SII (Suministro Inmediato de Información), which consist of informing the Tax Authority on specific dates of invoices received and issued.

Other Taxes Payable

Tax Reference
Payroll Tax Payroll tax is levied on employers, with the amount based on salaries, wages and benefitspaid to employees.
Tax on Property Conveyances Rates from 4% up to 10% on the transfer of real property and some other business or individual property.
Land Tax Land tax is applied for owning Real Estate (0,3% to 1,3% range of the cadastral value).

Wealth tax

It is a direct tax for the property of goods.
It is applicable in all Spain with different rates according to each region. (Madrid,e.g. is 100% exempt)

Last updated: 26.05.2020

Financial Year – 1 January – 31 December
Currency – Euro

Corporate Tax Summary

Residence – A company is considered to be a resident in Spain if it complies with one of these requirements:

  • Creation under Spanish law
  • With an address in Spain
  • Its management address or control centre of activities are in Spain.

Basis of Taxation – Resident companies are taxed on worldwide income. A non-resident company generally pays taxes only on income derived from Spanish sources. The tax rates and treatment are the same for companies and branches of foreign companies. Documentation obligations of related operations

1. Definition of related persons or entities

a) An entity and its partners (natural or legal entities), with a minimum direct or indirect participation of at least 25% of the capital.
b) An entity and its administrators, except for their remuneration as directors.
c) The relatives of the partners or administrators up to the third degree of kinship.
d) Two entities in which the same partners or their relatives up to the third degree, participate, directly or indirectly, in at least 25 per cent of the share capital.
e) Two entities belonging to the same group.
f) One entity and the directors of another entity, when both entities belong to the same group.
g) An entity resident in Spanish territory and its permanent establishments abroad.
h) Entities resident in tax havens (even if they are not related) (they have the same treatment and documentation obligations).

2. Formal Transfer Pricing Obligations

2.1. Documentation of Related Operations (master and localfile)

Individual companies (Countryfile or localfile):

a) Standardized Document (basic): for companies of Reduced Size (turnover of the previous fiscal year < 10 million euros). b. Simplified content documentation: for companies whose individual or joint turnover in their group is between 10 and 45 million euros. c. Specific Taxpayer Documentation: for companies whose individual or joint turnover of their group is > 45 million euros.

Additional documentation for Groups of companies:

a. Group documentation (Masterfile): for groups of companies with a joint turnover of > 45 million euros.

Local and masterfile preparation deadlines: 6 months and 25 days after the end of the fiscal year. There is no obligation to file it, if required, the delivery time is 10 days.

2.2.  Exceptions:

Documentation will not be required, in general:

a) To transactions carried out between entities of the same “tax consolidation group”;
b) To transactions carried out with related entities, when the aggregate amount of the transactions does not exceed 250,000 euros at market value.

2.3 Informative statements:

a) Model 231: Information Statement. (CbCr – Country by Country Report) for groups of companies with a combined turnover of > 750 MM (Model 231). Presentation period: 12 months after the end of said tax period.
b) Form 232: Information return on related-party transactions and transactions and situations related to countries or territories classified as tax havens. Presentation period: 11 months after the end of said tax period.

Reference
Corporate Income Tax Rate (%) 25% 25% general rate, 15% entities of new creation (under restricted conditions, non groups, e.g.) during the first two years with corporate profit.
Branch Tax Rate (%) 25% 25% general rate.
Withholding Tax Rate:
Dividends – Franked 19% – 23% Individual shareholder
Dividends – Unfranked 0% Corporate shareholder.
Dividends – Conduit Foreign Income N/A N/A
Interest 19% 19% Individual lender. Foreign company: According to DTC between countries
Royalties from Intellectual Property 10% According to DTC between countries
Fund Payments from Managed Investment Trusts
Branch Remittance Tax 0% According to DTC between countries
Net Operating Losses (Years)
Carry back N/A
Carry forward Indefinite

Individual Tax Summary

Residence – For tax purposes an individual is a resident if he/she ordinarily “resides” in Spain or meets one of the following requirements:
1ª Has spent more than half a year (183 days) in Spain

2ª Has allocated in Spain his/her main activity or economic interests (directly or indirectly)

3º Has allocated in Spain his/her personal interests (family, son, daugther, …)

Basis of Taxation – Resident taxpayers are generally taxed on worldwide income, with a tax offset for foreign tax paid on foreign income, up to the amount of Spain tax payable on that income. The special system for workers posted is taxable at a fixed rate, 24% up to the first €600.000 incomes and 45% for the rest of the incomes for 6 years.

Filing Status – Each taxpayer must file a separate return each calendar year; joint returns are permitted with some limitations.

Personal Income Tax Rates

Taxable Income Tax Payable – Residents Tax Payable – Non Residents
0 up to 12.450 €uros 19%
12.450 up to 20.200 €uros 24%
20.200 up to 35.200€uros 30%
35.200 up to 60.000 €uros 37%
60.000 up to … 45%

According to where individuals reside taxable incomes is reduced according to his/her personal circumstances with a minimun of €5.500. Foreign residents are taxable only on the income made in Spain.

Real Estate property pay 2% (1.1% in some situations) of cadastral value.

Profit for Real Estate pay 24% (19% EU)

Transfer of Real Estate 19%

Goods and Services Tax (GST)

Rate 21%
Taxable Transactions VAT is the value added tax on the goods and services in Spain. There are three different rates of VAT: 21% is the standard tax rate, 10% for specific products and services and 4% for essential goods. Not all transactions are taxable, there are some which are exempt from the IVA/VAT such as exports and transactions with EU countries with certain criteria.
If the result of the operations during a year is a tax credit at the end of the year, the tax payer can request this amount.
Registration The registration is mandatory for the individual and companies who perform operations that are VAT taxable. Additionally, to be able to avail of the exemptions for intra-community operations it is compulsory to register as an IC operator within the EU.
Filing and Payment The submission and payment is generally quarterly; however, there are two conditions that require a monthly submission, these are:
– Companies with an annual turnover higher than €6.000.000
– Companies that wish to request their VAT credit monthly if there are more VAT to claim than to pay.
These last two conditions also require the submission of what is known as SII (Suministro Inmediato de Información), which consist of informing the Tax Authority on specific dates of invoices received and issued.

Other Taxes Payable

Tax Reference
Payroll Tax Payroll tax is levied on employers, with the amount based on salaries, wages and benefitspaid to employees.
Tax on Property Conveyances Rates from 4% up to 10% on the transfer of real property and some other business or individual property.
Land Tax Land tax is applied for owning Real Estate (0,3% to 1,3% range of the cadastral value).

Wealth tax

It is a direct tax for the property of goods.
It is applicable in all Spain with different rates according to each region. (Madrid,e.g. is 100% exempt)

Last updated: 26.05.2020

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