Spain
Scope of Income Tax
All
resident companies and permanent establishments
of non-resident companies are subject to income
tax. Resident companies are liable for tax
on their worldwide income. Non-resident companies
are taxed on their Spanish-sourced income
only.
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Spain Income Tax Rates
The
corporate income tax rate for 2010 is 30%.
For businesses with a turnover of less than
EUR8m, the first EUR120,202.41 of profit are
taxed at 25% and anything above that at 30%.
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Spain Calculation of Taxable Base
Taxable
income includes all trading profits, passive
income and capital gains. The first EUR6,000
of capital gains is taxed at 19%; after that,
the rate increases to 21%.
Federal
or local losses may be carried forward for
a maximum of 15 years.
Spain Filing Requirements
and Payment of Tax
The
tax year is generally the calendar year, although
the company may choose an alternative accounting
year. Tax returns must be filed and all taxes
due paid by the 25th day following the sixth
month of the end of the tax year.
Companies
are generally required to make three tax prepayments
in April, October and December of each year,
based on accounts of the first three, nine
and 11 months of the calendar year, respectively.
This is compulsory for businesses with an
annual turnover of more than EUR6,010,121.04
(for 2010), at a rate of 21%. However, companies
with a turnover below this threshold can opt
to pay instalments at a rate of 18% of the
gross tax payable in the previous year.
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Spain Withholding Taxes
Withholding
tax of 19% is payable on interest and dividend
payments, whether domestic or to non-treaty
countries. However, where dividends are paid
to a company that has share capital, which
has been held during the prior year, equal
to or above 5%, withholding tax does not apply.
Royalties
are generally subject to withholding tax of
24% in the case of the licensing of rights
of publicity, and 18% for other royalties.
Until 2011, royalties paid to associated EU-resident
companies are subject to withholding tax of
10%.
Other
withholding taxes include 18% on commission,
rental payments and contest prizes; 15% on
income from courses, conferences, symposiums,
seminars or derived from the literary, artistic
or scientific work; and 2% on farming income
and forestry activities.
Spain Sales Taxes and VAT
The
standard VAT rate is 16%. A reduced rate of
7% applies to food production and services.
From July 1, 2010 these rates will increase
to 18% and 8% respectively.
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