Paying Taxes in Spain

1. What is the corporate tax in Spain?
The standard Spanish corporate tax levied on companies activating on the country's territory is 35%. However companies with yearly sales of less then 8 million euros benefit from certain deductions and 10% tax credit can be obtained for investments and expenses in internet, communications and information tehnology.

2. What is the VAT in Spain?
The VAT rate in Spain is 18% since 2010. However reduced rates apply to certain goods and services.

3. How can the VAT be refunded in Spain?
The Spanish 18% VAT rate applies to sale go goods and services and companies' profits are affected. However the Value Added Tax can be recovered provided the company proves the business is subject to VAT taxation. In order for a company to obtain the refund, the owner must sign an application containing original invoices which must be submitted to the Spanish tax authorities. The minimum amount should be no less then 200 euros. The deadline for filling the refund application is 6 months after the end of the year. Usually the refund is made in 3 months by bank transfer.

4. What is the dividend tax in Spain?
Dividend tax, or withholding tax imposed by the Spanish Tax Law has a standard rate of 15%.

5. Are there any incentives for foreign investors in Spain?
Besides the geographical location and permanent flux of business possibilities, foreign investors who decide to set business in Spain benefit from a welcoming environment where foreign investment is valuable. The Spanish government has taken measures to encourage it by offering different incentives for investors, such as preferential loans and grants as well as reduced taxes for businesses activating in health, education infrastructure, information, communication and development.

6. Why do I need a local accountant for my Spanish business?
Companies in Spain need to work with an accountant in order to complete tax fillings and other financial procedures. Even if the financial system is comprehensive and straight-forward a local accountant is recommended for foreign-owned companies that engage in business in Spain. A local accountant offers a better understanding of the Spanish economical environment has a longer experience and can advise the entrepreneur as to the best solution for the business.