Accounts & Taxes in Spain
After several years consulting various national bodies of accountants, Spain enacted in 2008 legislation to bring accounting standards in Spain into line with international standards. Corporate tax in Spain (Impuesto de Sociedades) is a direct tax on corporate profits obtained within the taxation period, which normally coincides with the calendar year, unless a different period is stated in the company's articles of association. In any case, the tax period cannot exceed 12 months according to the rules of accounting in Spain. In terms of the applicable percentage, there are 2 cases we might consider:
Spanish resident companies (considered Spanish resident if it fulfils any of the following conditions):
- If the company was incorporated under Spanish law
- If the company's registered office is in Spain
- If the company's management and head-office are located in Spain.
Tax Year and Filing
For the purposes of accounting in Spain the time for making Corporate Tax returns depends upon when the financial year of the company begins. Under Spanish Tax regulations, the yearly tax returns must be made within 25 natural (i.e. uninterrupted) days following the 6 month period after the end of the financial year.
So, for example, a company that has its financial year end in Dec 31 must present its tax returns in the first 25 days of July of the following year. The tax return should be made even though the company did not carry out any activity and even though there is no income for the relevant period.
While it is possible to delay tax payments (up to certain limits) where the company finds itself in difficulties, such delays come at the cost of high interest. Failure to make the tax return will result in a fine.
All companies resident in Spain are subject to the tax. This includes all limited liability companies, Cooperative Societies, Public Companies etc. Also liable are all sorts of pensions funds, Capital Risk funds, Guaranteed investment funds etc even though they may not have legal personality. Not included are Civil Societies. Non-resident Branch offices with a permanent establishment in Spain are generally liable for corporate tax on their profits directly generated in Spain.