Guide to Corporate, Income and Business Taxes in Spain

Which taxes apply to your business in Spain and how much will it cost you. Information about what it will cost you to be in business and some of the things you should be aware of including corporate income tax (Impuesto de Sociedades), VAT (IVA) and tax on business activity (IAE).

National taxes

Corporate Income Tax (Impuesto de Sociedades):

• 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
• A 10% tax credit for investments and expenses in the 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.

Local taxes

Tax on Business Activity (IAE):

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 the number of employees.

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