.png)
In Spain, Value Added Tax taxes deliveries of goods and services carried out in the Spanish territory subject to this tax, as well as intra-community imports and acquisitions of goods and services. The applicable tax rates are as follows:
Instead of VAT, in the Canary Islands, the General Indirect Canary Islands Tax (IGIC) applies. The IGIC tax rates are as follows:
The IGIC has some differences with respect to VAT, and imports of tangible property into the Canary Islands are subject to this tax.
In Ceuta and Melilla, Sales Tax applies instead of VAT. This tax has different characteristics and tax types from those of VAT.
Many goods imported into Spain from outside the European Union are subject to customs duties. The rates are set by the EU's Common Customs Tariff and vary widely.
Special taxes apply to most petroleum hydrocarbons, alcoholic beverages and tobacco products that are imported or produced in Spain. Here are some examples:
As of January 1, 2023, the Tax on Non-Reusable Plastic Packaging has been implemented. This tax is levied on the manufacture, intra-community acquisition and import of non-reusable plastic containers, covering any type of container containing plastic intended to contain, protect, distribute or handle goods.
The established tax rate is 0.45 euros per kilogram of plastic included in the containers.
Responsible for the Tax:
Potential Tax Benefits:
To benefit from these tax exemptions and benefits, it is necessary to comply with established conditions and provide the required documentation to the tax authorities when necessary.
Companies domiciled in jurisdictions considered tax havens that own real estate or hold real rights to real estate in Spain are subject to a special tax. This tax is due on December 31 of each year and must be declared and paid in January of the following year, following the procedures and forms established by current legislation.
The applicable tax rate is 3% on the cadastral value of the real estate in question.
The Property Transfer Tax taxes inter vivo transfers of assets and rights, including real estate and real estate leases that are exempt from VAT. The tax rate varies between 6% and 11%, depending on the region.
Key Aspects:
Property Transfers: Second and subsequent transfers of real estate are exempt from VAT and are therefore subject to Property Transfer Tax.
Home Leases: These leases are exempt from VAT and, consequently, subject to the Property Transfer Tax.
Transfers of Securities: In general, transfers of quoted or unquoted securities are exempt from both Property Transfer Tax and VAT. However, this exemption does not apply to transfers of unquoted securities of a company in the secondary market that seeks to evade tax through an indirect transfer of real estate. Spanish legislation provides for certain circumstances that suggest an intention to evade the tax.
Exceptions to the Exemption: The exception to the exemption does not apply to transfers of securities derived from the incorporation by banks of asset management companies or to transfers of securities from banks involved in integration plans regulated by Law 9/2012, which will be exempt from the Tax on Property Transfers. In addition, asset acquisitions in the Canary Islands may be exempt from Property Transfer Tax (and the IGIC) if certain requirements are met.
Restructuring Operations: Restructuring operations, such as mergers, spin-offs, stock exchanges and certain in-kind contributions, are exempt from the Property Transfer Tax.
The Tax on Documented Legal Acts applies mainly to notarial documents and records that certify transactions with economic value and that must be registered in public records, such as those of companies, real estate and industrial property.
This tax is incompatible with the Tax on Property Transfers and Documented Legal Acts, but it is compatible with VAT. The general tax rate varies between 0.75% and 1.5%, depending on the region in Spain, and special rates are established for different taxable events.
Scope of Application:
Notarial Documents and Public Records: The tax taxes documents that certify transactions with economic value and that require registration in public records.
Business Documents: It also applies to certain commercial documents, such as bills of exchange and promissory notes.
Judicial and Administrative Documents: The tax extends to specific judicial and administrative documents.
The variability in the tax rate and the special rates established for different situations reflect the diversity of taxable events and the different applications of the tax depending on the region.
The Capital Contribution Tax applies to capital reductions and to the dissolution of companies. This tax, with a rate of 1%, must be paid by shareholders.
Key Aspects:
The application of the tax is subject to the regulations that define its compatibility and the exceptions provided for different tax scenarios.
Employers are required to withhold a percentage of their employees' salaries and benefits as an advance on Personal Income Tax (IRPF). This withholding is progressive, with rates that vary between 19% and 47%, depending on the worker's personal circumstances and income level.
Key Aspects:
Progressive Retention: The retention percentage is adjusted based on the employee's income and personal situation, with higher retention for those with higher incomes.
Employer Obligation: It is the employer's responsibility to apply the corresponding withholding to each payroll and to make the payment of these amounts on behalf of the employee.
This withholding system ensures that workers contribute in advance to the payment of their personal income tax, adjusted to their economic capacity.
Employers are required to make Social Security contributions on behalf of their employees. In the general regime, the contribution rate is 30.48%, to which is added an additional variable rate that depends on the risk associated with the job (for example, 1.5% for office activities).
Employers, in addition to the fixed rate of 30.48%, employers must provide an additional percentage to cover occupational risks, which varies depending on the nature of the activity carried out. Workers are also required to contribute to the Social Security system, with a contribution rate of 6.47%, which is directly deducted from their salary by the employer.
Contributions are calculated on the worker's total gross monthly income, whether in cash or in kind. There is a minimum contribution base which varies between 1,323 and 1,847.40 euros per month, depending on the employee's professional category. There is also a maximum contribution base monthly set at 4,720.50 euros.
The employer is responsible for paying both his share of the contributions and the part corresponding to the workers in the General Social Security Treasury.
The provision of certain digital services involving users located in Spain is subject to a 3% tax. This tax applies to services such as online advertising, online brokerage services, and data transmission.
Those entities, whether they are tax residents in Spain or not, that meet any of the following criteria are subject to this tax:
For entities that are part of a group of companies, the above-mentioned thresholds are evaluated at the level of the group as a whole.
Onerous acquisitions of shares in listed companies in Spain, with a market capitalization of more than 1 billion euros as of December 1 of the previous year, are subject to Financial Transfer Tax. This is an indirect tax that taxes such transactions.
The tax is applied at a rate of 0.2%, regardless of the residence of the parties involved or the place where the transaction takes place.
Exemptions:
The temporary energy tax has been established for the years 2023 and 2024, with the purpose of allowing the Government to evaluate its impact during the last quarter of 2024 and determine the appropriateness of its permanence.
This tax applies to the main operators in the energy sectors, as well as to individuals or legal entities that in Spain are engaged in the production of crude oil, natural gas, coal mining or oil refining, with some exemptions. The tax rate is 1.2% of the net amount of turnover obtained in Spain during the year prior to the birth of the payment obligation. This amount must be paid in advance and cannot be considered as a deductible expense in Corporate Tax. In addition, it is forbidden to pass on this tax economically, both directly and indirectly.
In the case of tax groups for corporate tax purposes, the tax base is determined by adding the turnover of all the entities that make up the group. This tax seeks to capture a portion of the revenues of large energy companies during a specific period, in response to the fiscal and regulatory needs of the energy sector.
The temporary tax on credit institutions and financial credit institutions has been established for the years 2023 and 2024, with the possibility that the Government will evaluate its effects in the last quarter of 2024 and consider its permanence.
This tax applies to credit institutions and financial establishments operating in Spain, provided that the sum of their interest and commission income during the 2019 financial year, determined in accordance with applicable accounting regulations, is equal to or greater than 800 million euros.
For tax groups for corporate tax purposes, the tax base is calculated by adding the net interest and commission income of all the entities that are part of the group. The rate applied is 4.8% on the sum of these net revenues and the expenses derived from the activity in Spain, with the obligation to pay in advance. This tax is not considered a deductible expense in Corporate Tax and cannot be financially reflected, either directly or indirectly.
The purpose of this temporary tax is to tax the income of large financial institutions in Spain, reflecting the need for a fiscal framework adjusted to the economic and operational reality of the financial sector.
In addition to general taxes, businesses may also be subject to various local taxes that vary by location. Some of these local taxes include:
.png)
