If you’ve set up a company, you are liable for company taxes in Spain. These are applied to all profits earned by the company after expenses have been deducted.
Company tax has a fixed rate in Spain (usually 25%) and is not based on a sliding scale as is the case with personal income tax.
Effective management of your company taxes in Spain
Like most countries, companies in Spain are required to keep and present comprehensive tax accounts and records as well as file quarterly and annual returns. The complex nature of company taxes in Spain means that it’s essential to use the services of a tax advisor. A professional will also ensure that your tax bill includes all deductions available so that your company pays no more tax than necessary.
Our team at Costaluz Lawyers includes expert tax advisors, experienced in company taxes in Spain. Get in touch to find out how they can help you or fill in the form below.
Company tax rate in Spain
As a general rule, the tax rate is a fixed 25%. However, there are exceptions and, in many cases, companies pay a lower amount. For example:
- First year of business – Spain offers a tax incentive to new businesses and taxes their profits at 15% during the first year.
- Foundations and associations – pay a flat rate of 10%.
- Non-profit organisations and cooperatives – pay a flat rate of 20%.
Calculation of company taxes
To put it simply, the fixed-rate (depending on the company as above) is applied to the result you get when you subtract the cost of expenses from the profit. However, the final result depends on a number of other factors such as:
- Non-tax-deductible expenses – these cover a wide range of costs such as donations, fines, corporate tax expenses and remuneration of the company’s own funds.
- Compensation for tax losses – your company may have made a loss in previous tax years and Spanish law allows you to offset this.
- Deductions – companies may also apply deductions to their tax bill for investment in R&D, for example or for double taxation.
As we can see from this list, company taxation management requires expertise from a professional au fait with the Spanish tax system.
Tax planning for your company
One of the advantages of using a professional to manage your company tax matters in Spain is that they can use their expertise to help you plan your spending ahead. Done effectively, this will allow you to make considerable savings on company taxes in a year.
There are a number of ways of saving tax by planning your company spending a year in advance and your tax advisor will calculate the best for your situation.
If you’d like to save on company taxes, ensure that you pay exactly what is due and at the right time and discover ways to plan your expenses to minimise tax liability, get in touch with our team of experts.