When there is more than one country involved, tax planning requires a level of expertise that few firms can offer. Many of our clients pay personal taxes and business taxes in a foreign country, as well as personal and business taxes in Spain. Strong Abogados has expert advisors who can guide you regarding the proper distribution of assets, dividends and salaries, as well as where to determine residence in order to optimize your overall tax burden.
Corporate Income Tax (Impuesto de Sociedades): national
Spain's standard corporate income tax rate is 25%, except for a few exceptions (such as ZEC entities in the Canary Islands). New entities get a tax rate of 15% in the first year where a profit is posted, as well as the year after that.
VAT Tax (IVA): national
The purpose of VAT is as a tax on end-consumers; businesses are generally entitled to deduct VAT borne against VAT charged. Read more at VAT tax in Spain.
Tax on Business Activity (IAE): local
As of 2003, this tax is waived for businesses that have a profit of under one million euros. This is an annual tax paid by businesses operating in the municipality. This tax rate depends on many factors, such as size and location of the business, the type of business, and number of employees.