Spain legal and accounting and tax considerations in 2024

Spain tax planning and legal incorporation services

  1. For the first two years, companies in Spain are taxed at a rate of 15%. Thereafter, the corporate tax rate is 25%;
  2. The standard VAT rate in Spain is 21%. Companies with annual revenue higher than €6m must file their VAT returns monthly. All other companies must file quarterly returns;
  3. Dividends and interest payments to a non-EU company suffer withholding tax rate of 19%. Royalty payments to a non-EU company are subject to withholding tax rate of 24%;
  4. Net operating losses can be carried forward indefinitely. Losses can be offset against up to 70%, 50% for taxpayers with annual revenue between €20m and €60m, 25% for taxpayers with annual revenue more than €60m. Losses that are not more than €1m can be offset without limitation in any case;
  5. Resident companies are required to submit their annual financial statements and tax returns to the Central Mercantile Registry within 6 months of the end of the accounting year;
  6. Companies can be exempt from annual audit if i) total assets are less than €2.85m ii) annual revenue is less than €5.7m and iii) less than 50 people are employed for two consecutive years. This exemption does not apply to financial intermediaries and insurance companies;
  7. Spain has signed double taxation treaties with 96 countries including Australia, Canada, China, Singapore and USA to reduce withholding tax on payments abroad;
  8. Healy Consultants Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budgets and sensitivity analysis.
  9. All companies are required to make three interim payments on their corporate tax accounts in April, October and December;
  10. Resident companies owning 75% of subsidiary companies must file consolidated tax returns;
  11. Stamp Duty is levied at 0.5% of the value of the paid up share capital of the notarized documents submitted in the public register;
  12. Transfer Tax of 6% is levied on acquisitions of Spanish real estate;
  13. For an active trading company, these accounting and tax fees are an estimate of Healy Consultants fees to efficiently and effectively discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, Healy Consultants will more accurately advise accounting and tax fees. For a dormant company, Healy Consultants fees are only €950;
  14. In accordance with Spain law, each entity must register for corporate tax and VAT at the Agencia Tributaria. Healy Consultants will be happy to assist you with tax and VAT registration for a one time fee of €750;
  15. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

  • Spanish company formation considerations

    • A typical Spanish company can be incorporated with 1 director and 1 shareholder, who can be of any nationality. However, a resident company secretary must be appointed;
    • Every Spanish company needs to have at least one director and one shareholder. Before Spanish company formation, all directors and shareholders also require a Spanish fiscal identification number (NIE);
    • The minimum initial paid up capital for an LLC will be €3,000 and for a Public Limited Company will be €60,000. 25% of this capital must be deposited before notarization of the company incorporation documents while the rest must be deposited within a fixed period mentioned in the articles of association;
    • The company M&AA includes i) the identity and tax identification of the shareholders ii) the identity of directors iii) the by-laws governing the company iv) the paid-up capital of the shareholders and the number of shares owned and v) the certificate of deposit.
  • Business regulations

    • Spain does not have any restrictions on foreign currency operations but the government requires prior reporting of certain capital movements for statistical purposes & to prevent money laundering & tax fraud;
    • Spanish legal system is party to the New York convention on Recognition and Enforcement of International Arbitral awards. So, arbitration in other countries which follow this convention will be enforceable in Spain;
    • Personal Data Protection Act bars firms from using personal information about individuals without their permission;
    • Spanish law bars discrimination in matters of employment on the grounds of religion, caste, creed and gender;
    • Spain’s anti-competition law prevents the formation of cartels and monopolies. So, firms must take permission from the authorities on all mergers and acquisitions matters.
  • Labor regulations

    • The rate for employers (plus a professional contingency rate depending on the company activities) is 29% plus a variable percentage to cover labor accidents and illness(the percentage depends on the activities). The employee rate (indefinite contracts) is 6.35%;
    • The standard working time is 40 hours a week. Overtime work is permitted up to 80 hours a year;
    • Before firing an existing employee, the employer must provide compensation worth 20 days’ salary per year worked.

Contact us

For additional information on our accounting and legal services in Spain, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi