Taxes - Spain
In Spain there are different levels of administration: central government, Autonomous Communities (regions) and local authorities.
These administrations can impose taxes according to their specific powers. This is reflected in the general tax laws and in those laws regulating specific taxes.
In Spain these administrations can apply different forms of taxation for the purpose of collecting public revenue, namely: rates, excise duties and taxes. The most common are taxes.
At national level, businesses may be subject to one or more of the following taxes:
- Personal Income Tax (IRPF): this is payable by sole traders who are not established as capital companies and who live in Spain. The rules are simple in order to facilitate compliance with tax obligations. An annual or quarterly tax return must be submitted, as applicable.
- Corporation Tax: this is paid on the profits of capital companies established in Spain. An annual tax return must be submitted at the end of each tax year.
- Non-Residents Income Tax: this is paid on the income of businesses not resident in Spain. A tax return must be submitted every year or as and when necessary.
- Value Added Tax (VAT): as in other European countries, this is paid on the consumption of goods and services by final consumers. It is businesses and professionals who collect VAT, which they charge to consumers and then pass on to the tax office. VAT returns/payments are normally submitted quarterly (monthly in some cases).
- Excise duties: these are paid on the consumption of alcohol, tobacco or fuel, among other items. They are normally paid on the consumption of goods or products by final consumers. They are collected by the businesses manufacturing, importing or selling the goods or products, which then declare and pay these duties.
- Customs duties: for imports from outside the European Union.
Most of the Autonomous Communities (regions) have their own general tax system. Within these tax systems, they have power over the following taxes: inheritance tax or gift tax and tax on transfers and documented legal acts. The Autonomous Communities can also apply their own taxes within the limits laid down by law. Some Autonomous Communities have introduced environmental protection or fuel consumption taxes.
There are also special tax systems in certain Autonomous Communities: Navarre and the Basque Country have their own tax systems for historical reasons. The Canaries and Ceuta and Melilla also have their own tax systems due to their geographical location.
Local authorities have very limited financial independence and powers to apply taxes. In particular they collect Trading Tax and other taxes.
Other local taxes include:
- Tax on real estate: this is paid by property owners on their real estate.
- Tax on mechanically powered vehicles: this is paid by owners of cars and transport vehicles.
- Tax on construction, installation and works: this is paid by the person responsible for the construction, installation or works.
- Tax on the increase in value of urban land: this is paid on the sale of urban property or land.
The following websites contain more information on local taxes:
In Spain many administrative procedures can be easily and simply carried out online. Information, forms and procedures can be accessed without the need for identification. However, for certain procedures, the person concerned needs to be identified, using passwords, an electronic certificate or an electronic national identity card.
Tax procedures when setting up a business
When setting up a business, various procedures must be completed with the National Tax Office, such as: registering in the register of businesses. This allows businesses and their employees to be identified.
Tax procedures while running a business
While the business is operating, it will be subject to a series of taxes on its business activity, as applicable.
At national level, tax returns and payments must be submitted to the National Tax Office in respect of various taxes. These procedures can be easily and simply carried out online.
You can obtain information and forms, submit tax returns and make tax payments online, via the website of the National Tax Office.
To obtain information and comply with tax obligations, businesses should access the following page:
Autonomous Communities (regions)
In those Autonomous Communities with their own general tax system, it should be borne in mind that the taxes will vary according to the Autonomous Community and the business activity concerned.
Tax management by local authorities
The various local authorities administer the Trading Tax.
Other local taxes have to be declared and paid in those cases in which they apply, for example: a property or vehicle that is owned must be declared annually. The tax on works is different in that it must be declared when these works are carried out.
Tax procedures when closing down a business
When a business is closed down, an application for de-registration from the register of professionals, sole traders or companies must be submitted to the National Tax Office.
Check also the legislation on this topic in: