.png)
The tax period for Corporation Tax coincides with the company's accounting year. This fiscal year cannot exceed 12 months. However, the incorporation of a company, the change in its accounting year or its dissolution can result in fiscal periods of less than one year.
In Spain, the tax system is based on the principle of self-assessment, meaning that tax returns are subject to review by tax authorities.
Annual Corporate Tax returns must be filed within 25 calendar days following the end of the sixth month following the close of the fiscal year. For example, if the fiscal year coincides with the calendar year, the return must be filed between July 1 and July 25 of the following year.
For Corporation Tax, three advance annual tax payments are required, which must be made during the first 20 calendar days of April, October and December. The final adjustment of the tax is made when the corresponding annual return is submitted.
For those companies whose turnover, according to Spanish VAT regulations, has exceeded 6,010,121.04 euros in the 12 months prior to the start of a tax period, on-account payments are determined by applying a rate of 17% on the tax base for each subscription period, adjusted, if appropriate, for the negative tax bases pending compensation. The interim payment periods correspond to the dates of March 31, September 30 and November 30 (this percentage is applicable to companies that pay taxes at the general rate of the IS). For entities whose turnover is equal to or greater than 10 million euros in the 12 months prior to the start of the tax period, the applicable percentage will be 24%.
Entities whose turnover in the 12 months prior to the start of the tax period reaches at least 10 million euros must also make a minimum prepayment of 23% on the profits reported in their income tax return for each early payment period.
Small and medium-sized businesses can choose to calculate their advances using the same percentage as large companies (17%) or apply a rate of 18% on the tax rate of their last IS advance return, filed on April 1, October 1 or December 1.
Variable capital investment firms, financial investment funds, real estate investment firms, real estate investment funds, mortgage market regulatory funds and pension funds that meet certain requirements and are taxed at a tax rate of 1% or even 0% are not required to make advance payments or to file the corresponding return.
Cash transactions that exceed 1,000 euros are prohibited when at least one of the parties involved is a person carrying out a business or professional activity. In these cases, penalties of up to 25% of the transaction amount may apply to both the payer and the recipient of the cash payment.
The Spanish Tax Agency has a tax inspection department responsible for verifying taxpayers' compliance with tax obligations. This department also has the authority to make fiscal adjustments when necessary, by issuing tax records.
As part of its functions, the tax inspection department can examine a taxpayer's tax matters to ensure the accuracy of the returns filed and confirm that all tax obligations are being properly met.
The tax returns selected for inspection are chosen based on several criteria, such as:
In case of disagreement with the liquidation carried out by the Tax Inspectorate after an inspection, the taxpayer has the right to file an appeal with the Economic-Administrative Court of Fiscal Resources. If the appeal is not accepted, recourse can be made to the ordinary jurisdiction.
If taxpayers have made excessive tax payments, they can request the return of overpaid amounts within the four-year statute of limitations period. This procedure is initiated by submitting an application to the appropriate tax authorities.
In Spain, the general statute of limitations for taxes is four years, starting the day after the end of the voluntary period for filing tax returns.
This four-year period can be resumed if the Tax Administration performs any action or procedure, with the formal recognition of the taxpayer, to identify, regulate, review, inspect, guarantee or collect all or part of a tax obligation. The statute of limitations may also resume due to taxpayer actions, such as filing a new or overdue return that modifies or corrects a previous return, or filing an appeal or claim in connection with the tax.
With regard to the verification or investigation of deferred tax losses, tax breaks for specific activities and deductions to avoid double taxation, the law of the tax authorities prescribes within ten years.
After those ten years have elapsed, the taxpayer must demonstrate the origin and amount of the negative tax bases by submitting the corresponding liquidation or self-assessment, together with the accounting books. In addition, proof must be provided that these liquidations and books were submitted and registered in the Commercial Registry within the established deadline.
Every year, the Spanish tax authorities issue general guidelines relating to the annual fiscal and customs control plan. These guidelines set out the specific areas in which tax authorities intend to intensify their verification, inspection and control activities during the corresponding fiscal year.
Assets located abroad, such as bank accounts, stocks or real estate, must be declared in accordance with current tax regulations.
A strict sanctioning regime was implemented for non-compliance with this obligation. However, in January 2022, the Court of Justice of the European Communities ruled that this sanctioning regime contravened European Union law, thus resolving years of uncertainty about its legality.
As a result, the Spanish tax system was updated, with a revision and a significant reduction of previously established sanctions.
.png)
