Accounting

Accounting Services

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Access to Online Accounting Platform

App for uploading Invoices and Tickets

Disposition of Online Invoicing Tool

Accounting and Tax Declarations

Individual Support and Fiscal Advice

Bank Accounts Connected to Platform

Treasury and Bank Consolidation

Representation before Tax Authorities

Handling of Tax Inspections

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Confirmation of Draft Declaration

Preparation of Standard Declaration

Preparation of Elaborate Declaration

Fiscal Environment

The Spanish fiscal system is organized on three different levels (State, Community and Local Entities) and all of them can establish and collect taxes by law and constitution. Because of this, there are several institutions, each of them with there own regulations, procedures and systems, to deal with.

Overall, fiscal pressure in Spain is below the EU average, but there is an unequal distribution between individuals and small companies on one side, that pay proportionally more, and, on the other side, large companies that (controversially) enjoy tax exemptions, bonifications and loopholes.

Consequently, elimination of benefits for large corporations and measures against corruption and tax evasion are hot topics on the Spanish political agenda.

Fiscal Environment
Fiscal Obligations

Fiscal Obligations

One of the first things to do when starting an economic activity is to register in the census of Companies and Independent Professionals and to state the taxes that you are legally obliged to pay. This must be done before or shortly after the start of business.

Both companies and independent professionals have the obligation to carry and keep accounts according to the Spanish Code of Commerce and the General Accounting Plan and to present the corresponding tax declarations. As opposed to companies, independent professionals are not obliged to deposit and legalize their annual accounts.

Companies present their Company Tax declaration in July and Professionals present their Personal Income Tax declaration in June. Other obligations consist of declaring paid and received VAT, Practiced Retentions, EU Intra-Community operations, and Operations with Third Parties over €3.000, amongst others.

Taxes

Currently, Company Tax stands at 25%, Dividend Tax lies between 19% and 23% and Income Tax is progressive up to 45%. Reductions and Bonifications may apply. The normal VAT rate applied is 21% with reduced rates of 10% and 4% depending on the type of products or services concerned.

If you are in Spain more than 183 days a year or your economical or family nucleus resides in the country, you are considered a fiscal resident. In this case, you will need to declare and pay taxes over your worldwide income and assets, and you need to file a Spanish tax declaration. However, special rules may apply.

A non-resident might have to pay taxes for income received or assets located in the country. This taxation will depend on the Double Taxation Agreement between Spain and the country of residence and may include local Real Estate Tax, Non-Resident Income Tax and Net Wealth Tax. Softer rules apply for EU residents as compared to the rest of the world.

The “Beckham Law” is a Spanish tax law that was passed in 2005. With the Beckham Law, an expat can apply to be taxed according to a special regime applicable to employees displaced to work in Spain, which means they will only be taxed on income they earn in Spain, subject to a flat 24% tax rate.

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hacienda

Hacienda

The Agencia Tributaria (AEAT) popularly known as “Hacienda” is the state entity responsible for collecting taxes according to constitutional principles like equality, progressivity and economical capacity. It is also one of the most advanced tax authorities in Europe concerning digitalization and Big Data capabilities, so cheating the taxman in Spain is not a good idea.

Hacienda is quick to detect incoherencies in tax declarations and imposes fines and interest payments on top of the taxes due. Tax inspections are frequent, and the responsibility of proving that all is in order lies with the taxpayer. It can be a very time-consuming exercise to pull all the information together in order to correctly and timely argue your case with Hacienda.

As Spain has a chronical deficit that is under scrutiny by the EU, Hacienda is quick to collect and slow to pay. Professional assistance is recommended for getting your money back from the state. 

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