Spain is a country where taxes are high, but there exist reliefs, e.g., for start-ups or preferential rules for companies starting their business. Learn more about the tax system in Spain.
Taxes in Spain
The basic corporate Income tax (CIT) rate in Spain is 25%.
Companies being tax residents are taxed on their income earned all over the world.
In the case of the plants of foreign companies in Spain, the non-resident income tax (NRIT) is charged on the income that was earned in Spain, at a rate of 25%. NRIT is also collected from foreign businesses or individuals who achieve income in Spain.
For the first two years of profitable operation, newly established companies are taxed at a rate of 15% on their income. Nevertheless, this does not apply to capital corporations.
There is a local tax on economic and occupational activity in Spain. It is a direct tax collected annually for economic, professional, or artistic activities conducted in Spain, regardless of whether they are carried out on designated premises. Nevertheless, such a tax may not exceed 15% of the assumed average business profits.
Non-Spanish resident companies carrying out business through an establishment in Spain are exempt from this tax if their net turnover for the tax year in which the last CIT/NRIT return was filed is less than 1 million EUR.
The standard VAT rate in Spain is 21%.
Spanish Taxes – note the following:
Businesses operating in the Canary Islands, Ceuta, and Melilla benefit from lower taxes compared to mainland Spain. Local taxes and, for example, value added tax are also lower.
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HOW TO CHOOSE THE RIGHT COUNTRY TO MOVE TO?
Moving abroad is a highly significant step in life. Tax issues should come as the last matter to be considered. Think about where you would like to live, where your children should go to school and where you want to run a business. Only after honestly answering these questions, can you decide which country will be the most suitable for all your needs.
WHAT FORMALITIES DO I HAVE TO COMPLETE WHEN MOVING OUT OF POLAND?
There are many formalities, and they depend primarily on the current situation. The aim should be to completely sever all ties with Poland.
DO I HAVE TO FILE A TAX RETURN IN POLAND AFTER MOVING AWAY?
Tax returns in Poland are submitted by Polish residents or persons earning income in Poland who are residents of another country. It all depends on whether you have successfully relinquished your Polish residence. And if you have, it also depends on the kind of income you earn in Poland.
WILL I PAY TAX IN POLAND BECAUSE OF RELOCATING THE COMPANY ABROAD?
The question is about the broad subject of exit tax. First of all, you need to verify what moving the company abroad actually means. It can be both the relocation of the registered office of the company and the personal move of the entrepreneur – a natural person. The tax implications of both situations may be significantly different.
CAN I TRANSFER THE COMPANY'S ASSETS TO THE DESTINATION COUNTRY TAX-FREE?
The general limit below which you do not have to pay exit tax in Poland is PLN 4 million. Nevertheless, it is always necessary to check this issue because the transfer of the company’s assets to the destination country will not always mean the same thing.