Corporate Taxes in Spain

Starting a Business in Spain - Corporate Taxes

Corporate Income Tax (Impuesto de Sociedades): national

Spain's standard corporate income tax rate is 35%. Companies with yearly sales of less than 8 million euros may qualify for certain tax incentives:

A tax rate of 30%, applicable to the first 120,000 euros of taxable income.
Accelerated depreciation of certain fixed assets.
A 10% tax credit for investments and expenses in internet, information technology, and communications.

VAT Tax (IVA): national

The purpose of VAT is as a tax on end-consumers; businesses are generally entitled to deduct VAT borne against VAT charged.

Tax on Business Activity (IAE): local

As of 2003, this tax is waived for businesses that have a profit of under one million euros. This is an annual tax paid by businesses operating in the municipality. This tax rate depends on many factors, such as size and location of the business, the type of business, and number of employees.

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