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CORPORATE TAX IN SPAIN

Is a personal and direct tax that affects the income of companies and other legal bodies.

Presentation time frame

This tax is paid in arrears from the 1st to 25th de July each year.

It is presented at the “Agencia Tributaria” (Spanish tax office) via tax form “modelo 200” when of a general character, but companies with a fiscal consolidation regime shall need to use the tax form “modelo 220”

Payment by instalments

These are payments made in anticipation towards the corporation tax to be paid. Fractioned payments, along with supported retentions and payments on account, are taken in to account when calculating the amount of corporate tax payable or returnable.
The tax form to be used to present these payments to the “Agencia Tributaria” (Tax office) is the form “202”  Except for companies with a fiscal consolidation regime, whom shall need to present the tax form “222”.

There are two modalities of fractioned payments. The most regular way is to pay 19% of the integral amount paid in concept of corporate tax the previous year. The time frame to present this is from the 1st to the 20th of April, October and December.

Tax percentages

Tax percentage:

  • General:  30%.
  • For companies of reduces dimension the percentages are the following:

a) For a taxable base of up to  300.000 euros it is 25 % ( 20 % if there is maintenance or employment development)
b) The rest at 30 % ( 25% if there is maintenance or employment development)

In the field of corporate tax, the companies of a reduced dimension will apply a 25% to the first 300.000 euros of taxable base, any excess will be taxed at 30%. Exceptionally, reduced dimension companies are able to apply a 20% tax rate for corporate tax in the years 2009, 2010 and 2011 for the first 300,000 Euros of taxable base as long as the company employment has not been reduced in comparison to the employment in 2008.

The reduced tax rate for maintenance or creation of employment applicable to reduced dimension companies has been extended in to cover the year 2012.


Concepts
  • Reduced dimension companies

Reduced dimension companies are those whose business net figure in the previous taxation period is less than 10 million euros, Independently to  the volume of the current taxation period business figure.

The following must be taken in to account:

-If the previous business activity is inferior to one year the calculations are carried out in proportion to the duration of the exercise
-For newly set up companies with a business activity inferior to one year the calculations are carried out in proportion to the duration of the exercise.

  • Large companies

Are those that exceeded ten million euros in operation volume in the previous exercise.


Audit obligation

A company shall be obliged to audit its accounts if in the past and current exercise it exceeds the following limits: 
 

  • Assets in excess of 2.850.000 euros.
  • Net business figure in excess 5.700.000 euros.
  • Over 50 employees on average (according to the ICAC workers contracted through an ETT are not considered employees).

Other scenarios in which a company must have their accounts audited are: 
1) If during the exercise the company received any subsidy or public or European grant amounting to a total of over 600.000 euros.
2) If during the exercise funds have been destined to building work/refurbishments, management of public services, supplies, advisory and assistance and services to public administrations, totalling over 600.000 euros, and this amount represents 50% of the annual net business figure.  

In the case of appointing an auditor, this auditor must remain in the position for a minimum of 3 years and a maximum of 9.

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