The tax obligations when setting up a business in Spain are inescapable for any entrepreneur, wherever they come from. If you are a foreign businessman or woman and have decided to invest in our country, you have made an excellent decision: the current situation is perfect to make business in Spain. Though, even being a foreign business your company is not free from paying taxes in the Spanish territory. The tax obligations can be a real labyrinth for anyone who is not familiar with our tax system… In fact, they are a labyrinth for Spanish entrepreneurs too!
But do not be discouraged: it is simpler than it seems. And there are many tools that will help you to do things right, in an efficient and transparent way. In this post we tell you which are the tax obligations when setting up a business in Spain, and why a legal and tax consultancy service can be an essential partner in your way to success. Take note!
Tax obligations when setting up a business in Spain: previous steps
☑ We assume that you have already created a business in Spain and know which are the advantages and benefits of investing in our country. You are aware of the possibility of hiring a legal and tax representative and know how to do things right in order to set up a solid, profitable project.
☑ The next step is getting all the available information about the Spanish tax system: which are the tax obligations when setting up a business in Spain and how they will affect your particular business. Our professional advice is to start with a previous analysis of your business operational performance: that is, to make a comprehensive review of the daily routine of your company in our country.
☑ If you try to draft this analysis by yourself, you may find hard obstacles such as the language, the system’s complexities, the deadlines… Do not hesitate: the best decision you can make is to hire a legal and tax representative in Spain that will remove all these concerns from you. In the analysis the experts will consider relevant aspects such as the company’s headquarters in Spain, the staff (if there is one) or the type of contracts you have signed with your providers, among many other things.
☑ Your business has a store in Spain from which the goods are distributed or do you have an office? Do you have staff? Does the company own any property (building, office, house…) in the Spanish territory? And if it does, have you put it to rent or are you thinking of selling it? All these aspects are crucial to know the tax obligations when setting up a business in Spain.
Taxes you must pay: setting out the tax obligations
The previous analysis is the first step, and as it will be the foundation of the following it must be really comprehensive and detailed. According to this analysis, the consultancy will draft a final report with the tax consequences: the tax obligations when setting up a business in Spain that affect your company specifically.
The two great pillars supporting all the corporate tax system in Spain are the IVA (VAT- Value Added Tax) and the IS (Corporate Tax). It is essential to analyze how they will affect your business, or even if they affect it at all! For example, there are a series of activities which do not pay VAT; you can read about them in the Spanish Tax Agency’s official website.
In the list of the tax obligations when setting up a business in Spain, there is another inescapable tax: the IRNR (Non-Resident Income Tax). In fact, this tax affects your business in a very specific way as a foreign entrepreneur wishing to invest in our country, always (watch out!) that you are a non-resident. A natural person or a company is considered non-resident when they have been living or established in Spain for more than 183 days. If your company has a legal and tax representative in Spain, a very interesting figure for foreign investors, you will not have to pay this specific tax but the IRPF (Natural Person Income Tax).
Look for professional advice!
It you are overwhelmed by all these tax obligations when setting up a business in Spain, stop for a moment. The best way to affront the quagmire is to look for professional advice. In LEIALTA we have experience in helping foreign investors to set up a businesses in Spain: we have a professional, English-speaking, young and experienced team to assist you in any way you need. With our help you will only have to take care of your business… And of course, to enjoy all the good things that Spain offers you! We will draft the previous analysis, make a report on your company’s tax obligations and help you with the procedures: from filling files to control tax payments.
Do you want to know more about the tax obligations when setting up a business in Spain? Want to know which are they exactly and how to manage them? Leave a comment or contact our business of consulting in Madrid and explain your situation. We are here to help you!
