Spanish business taxation
VAT
Current VAT rates
- 18% Standard rate applying to most goods and services
- 8% Reduced rate applying to various goods and services such as newly built properties, hotels, restaurants and entertainment
- 4% Reduced rate applying to goods considered as a basic necessity such as food and reading material.
Any person or entity trading in Spain must register and account for VAT and unlike other EU countries there is no registration exemption limit.
VAT returns must be filed quarterly (modelo 303) and refunds are only processed after the final annual VAT return (modelo 390) for the year has been submitted.
A quarterly declaration of intra community tax (modelo 349) must also be filed.
VAT registration for non-resident companies
A company incorporated outside of Spain and without a permanent establishment in Spain may register for Spanish VAT ( IVA ) and receive a non-resident VAT number (CIF no residente sin establecimiento permanente)
Procedure
Obtain a certificate from the Company Registry where the company is incorporated showing the following:-
- Company name
- Company number
- Registered office address
- List of shareholders and directors
The certificate should then be legalised and translated into Spanish prior to presenting at tax office.
The non-resident VAT number is normally issued on the same day of application or within 1 day.
Corporation tax
Corporation tax is payable on the companies net profits at 30%. Small companies qualify for a reduced rate of 25% on profits up to EUR120,000.
Corporation tax is paid 3 times a year (April, October & December) and is normally based on the previous year's liability ( modelo 202 ).
The final corporation tax return ( modelo 201 ) must be filed 6 months and 25 days after the end of the accounting period.
Returns of withholding taxes must be filed quarterly (modelo 110 & modelo 115) and annually (modelo 190 & modelo 180).
Details of any total invoicing exceeding EUR3,000 must be reported annually (modelo 347)
