/ 16 2015

2015 /16
Spain
FOREWORD
A country's tax regime is always a key factor for any business considering moving into new markets.
What is the corporate tax rate? Are there any incentives for overseas businesses? Are there double
tax treaties in place? How will foreign source income be taxed?
Since 1994, the PKF network of independent member firms, administered by PKF International
Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide international businesses
with the answers to these key tax questions.
As you will appreciate, the production of the WWTG is a huge team effort and we would like to
thank all tax experts within PKF member firms who gave up their time to contribute the vital
information on their country's taxes that forms the heart of this publication.
The PKF Worldwide Tax Guide 2015/16 (WWTG) is an annual publication that provides an overview
of the taxation and business regulation regimes of the world's most significant trading countries. In
compiling this publication, member firms of the PKF network have based their summaries on
information current on 1 January 2015, while also noting imminent changes where necessary.
On a country-by-country basis, each summary such as this one, addresses the major taxes applicable
to business; how taxable income is determined; sundry other related taxation and business issues;
and the country's personal tax regime. The final section of each country summary sets out the
Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends,
interest, royalties and other related payments.
While the WWTG should not to be regarded as offering a complete explanation of the taxation
issues in each country, we hope readers will use the publication as their first point of reference and
then use the services of their local PKF member firm to provide specific information and advice.
Services provided by member firms include:

Assurance & Advisory;

Financial Planning / Wealth Management;

Corporate Finance;

Management Consultancy;

IT Consultancy;

Insolvency - Corporate and Personal;

Taxation;

Forensic Accounting; and,

Hotel Consultancy.
In addition to the printed version of the WWTG, individual country taxation guides such as this are
available in PDF format which can be downloaded from the PKF website at www.pkf.com
PKF Worldwide Tax Guide 2015/16
1
Spain
IMPORTANT DISCLAIMER
This publication should not be regarded as offering a complete explanation of the taxation matters
that are contained within this publication. This publication has been sold or distributed on the
express terms and understanding that the publishers and the authors are not responsible for the
results of any actions which are undertaken on the basis of the information which is contained
within this publication, nor for any error in, or omission from, this publication.
The publishers and the authors expressly disclaim all and any liability and responsibility to any
person, entity or corporation who acts or fails to act as a consequence of any reliance upon the
whole or any part of the contents of this publication.
Accordingly no person, entity or corporation should act or rely upon any matter or information as
contained or implied within this publication without first obtaining advice from an appropriately
qualified professional person or firm of advisors, and ensuring that such advice specifically relates to
their particular circumstances.
PKF International is a family of legally independent member firms administered by PKF International
Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility
or liability for the actions or inactions on the part of any individual member firm or firms.
PKF INTERNATIONAL LIMITED
JUNE 2015
© PKF INTERNATIONAL LIMITED
All RIGHTS RESERVED
USE APPROVED WITH ATTRIBUTION
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Spain
STRUCTURE OF COUNTRY DESCRIPTIONS
A. TAXES PAYABLE
FEDERAL TAXES AND LEVIES
COMPANY TAX
CAPITAL GAINS
PERSONAL INCOME TAX
BRANCH PROFITS TAX
VALUE ADDED TAX (VAT)
FRINGE BENEFITS TAX (FBT)
LOCAL TAXES
OTHER TAXES
B. DETERMINATION OF TAXABLE INCOME
DEPRECIATION
STOCK
CAPITAL GAINS AND LOSSES
DIVIDENDS
INTEREST DEDUCTIONS
LOSSES
FOREIGN SOURCED INCOME
INCENTIVES
C. FOREIGN TAX RELIEF
D. CORPORATE GROUPS
E. RELATED PARTY TRANSACTIONS
F. WITHHOLDING TAX
G. EXCHANGE CONTROLS
H. PERSONAL TAX
I. TREATY AND NON-TREATY WITHHOLDING TAX RATES
PKF Worldwide Tax Guide 2015/16
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Spain
MEMBER FIRM
For further advice or information please contact:
City
Name
Contact information
Barcelona
Aischa Laarbi
+34 93 414 59 28
[email protected]
Madrid
Santiago Gonzalez Barrau
+34 91 556 11 99
[email protected]
Malaga
Ana Maria Lopez Narbona
+34 952 22 19 96
[email protected]
BASIC FACTS
Full name:
Capital:
Main languages:
Population:
Major religion:
Monetary unit:
Internet domain:
Int. dialling code:
Kingdom of Spain
Madrid
Spanish (Gastilian), Gatalan, Valencian, Gallego (Galician), Euskera (Basque)
46.70 million (2013 estimate)
Christianity
Euro (EUR)
.es (.cat for Catalonia)
+34
KEY TAX POINTS
•
A Spanish resident company is liable to corporation tax on all sources of income and capital
gains, wherever arising. A non-resident company is taxed on income and gains of a branch
carrying on a trade in Spain. Foreign branch profits of a Spanish company are liable to Spanish
tax.
•
Capital gains are taxed as ordinary income.
•
The transfer of real estate is generally subject to VAT at 21%. This is reduced to 10% for private
residential property. If the transferor is not within the VAT system, transfer tax at 6% is
applicable.
•
Transfer tax is payable on the transfer of movable property, at a rate of 4% of the value.
•
VAT is levied on the supply of taxable goods and services. The normal VAT rate is 21%. There is a
reduced rate of 10% and a super-reduced rate of 4% on certain basic goods and services. A zero
rate exists for exports and international services provided to non-EU countries.
•
Dividends and interest are generally paid subject to a withholding tax of 19% at source (20% on
2015), although this is normally reduced or eliminated by a double tax treaty.
•
Foreign taxes may be credited against Spanish corporation tax, whether or not a treaty exists
with the foreign country.
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•
Spanish-resident individuals are liable for personal tax on their worldwide income; nonresidents are only liable on Spanish-sourced income.
•
Resident individuals were subject to net wealth tax in respect of their worldwide assets. The
different autonomous governments can establish different reductions.
•
There is an inheritance tax charge on a recipient of property passing by gift or death.
A. TAXES PAYABLE
FEDERAL TAXES AND LEVIES
COMPANY TAX
Spanish resident companies are liable to corporation tax on all sources of income and capital gains,
wherever arising. A company is treated as resident in Spain if it is incorporated in Spain, has its
registered office in Spain or its effective management is in Spain.
A non-resident company is taxed on income and gains of a branch carrying on a trade in Spain.
Trading profits, other income and capital gains are liable to corporation tax at the rate of 25% (28%
on 2015). Special tax rates are chargeable on portfolio investment funds (1%), on mutual insurance
societies (25%), on co-operatives (except for capital gains) (20%), and on non-profit institutions
(10%).
For companies with an annual turnover in the previous year not exceeding EUR 10 million (small
companies) the rate applicable during 2015 is 25% on the first EUR 300,000 of taxable income and
28% on profits in excess of that limit.
For companies with an annual turnover in the previous year not exceeding EUR 5 million (micro
companies) are allowed to apply the general rate (25%) from 2015. These micro companies, with
fewer than 25 employees, need to maintain or create jobs.
The Spanish tax year is the calendar year but companies can establish a different tax year. The main
condition is that the tax year must not exceed 12 months.
Corporation tax is due for payment 6 months and 25 days after the financial year end (on 25 July
2015, for example, for the year ended 31 December 2014). The tax return must be filed by the same
date.
There are two systems for advance payments:
(1) Payments are calculated as 18% of the previous year's tax liability. The payments are due on 20
April, 20 October and 20 December.
(2)
Payments are based on the forecasted taxable income of the period as follows.
General rate is 17% (20% on 2015). Three payments due on:
•
20 April: Taxable income of the period January-March less withholdings.
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Spain
•
20 October: Taxable income of the period January-September less withholdings and advance
payment of 20 April.
•
20 December: Taxable income of the period January-November less withholdings and advance
payment of 20 April and 20 October.
The second system is mandatory for companies whose annual turnover is more than EUR 6,010,121.
In this system and only during 2012, 2013, 2014 and 2015, the general rate is 20% for companies
whose annual turnover is between EUR 0 and EUR 10,000,000, 21% for companies whose annual
turnover is between EUR 10,000,001 and EUR 20,000,000, 24% for companies whose annual
turnover is between EUR 20,000,001 and EUR 60,000,000 and 27% for those with turnover of more
than EUR 60,000,000.
CAPITAL GAINS
Capital gains are taxed as ordinary income. Foreign-sourced capital gains are fully liable to Spanish
corporate income tax with a credit for any foreign taxes payable, although such gains can be exempt
under the terms of a double tax treaty.
PERSONAL INCOME TAX
The personal income tax rate for capital gains as a result of the sale of wealth goods is 19% (20% on
2015).
Capital losses realised on the sale of goods may be offset against capital gains and saving incomes
(with the limit of 10% on 2015, 15% on 2016 and 20% on 2017) or carried forward for four years to
offset against capital gains realised in subsequent years.
The losses not generated from the disposal of any wealth good may be set off against up to 25% of
ordinary income and the remainder may be carried forward for up to four years to offset against
future capital gains realised on the sale of assets.
BRANCH PROFITS TAX
Foreign branch profits of a Spanish company will be liable to Spanish tax.
VALUE ADDED TAX (VAT)
VAT is levied on the supply of taxable goods and services. The normal VAT rate is 21%. There is a
reduced rate of 10% and a super-reduced rate of 4% on certain basic goods and services. A zero rate
exists for exports and international services provided to non-EU countries.
FRINGE BENEFITS TAX (FBT)
There is no fringe benefits tax in Spain.
LOCAL TAXES
The main local taxes comprise: transfer tax, economic activity tax (trade licenses), property tax, tax
on the increase of the value of urban land, tax on motor vehicles, tax on construction, planning
permission and opening licenses for each business premises.
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OTHER TAXES
The transfer of real estate is generally subject to VAT at 21%. This is reduced to 10% for private
residential property and to 4% in the case of some housing. If the transferor is not within the VAT
system, transfer tax at 6% is applicable. Transfer tax is also payable on the transfer of movable
property. The rate is 4% of the value. The Spanish autonomous regions are allowed to modify the
transfer tax rate and to fix their own rates (e.g. the tax rate for real estate properties is 10% in
Catalonia and 6% in Madrid).
B. DETERMINATION OF TAXABLE INCOME
Trading profits are calculated for tax purposes in accordance with financial accounts but adjusted for
the main items as follows.
DEPRECIATION
Depreciation can be deducted on a straight-line basis, reducing-balance basis (in the case of new
tangible assets with a life of more than three years) or on an individual basis (if approved by the tax
authorities).
The Ministry of Finance issues guidelines on the maximum straight-line rates as follows:
Asset
Rate (%)
Motor vehicles
16
Office equipment
10
Industrial buildings and hotels
3
Office and shop buildings
2
Air conditioning and central heating
12
Computer equipment
25
Software
33
Land cannot be depreciated.
STOCK
Stock and work in progress are valued at the lower of cost or market value. FIFO and average cost
methods are acceptable.
CAPITAL GAINS AND LOSSES
As discussed above, capital gains and losses are included in the overall taxable profits of companies.
DIVIDENDS
Dividends paid are subject to a 19% (20% on 2015) withholding tax at source whether they are paid
to residents. Dividends paid to EEC residents are subject to a 19% (20% on 2015). Dividends paid to
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non EEC residents are subject to a 24%.
The withholding tax rate may be reduced under the relevant double tax treaties. Dividends received
by certain companies (EU parent companies) are not subject to withholding tax at source if the
holding is more than 5% and has been held for more than 12 months. Ally withholding tax suffered
may be credited against the recipient company's corporate income tax liability.
A Spanish company receiving a dividend from another Spanish company whose share participation is
lower than 5% of the capital is subject to tax on 50% of the dividend. A Spanish portfolio investment
company or a parent that has held more than 5% of the share capital is exempt from tax on
dividends received from other Spanish companies.
INTEREST DEDUCTIONS
Interest is normally deductible on an accruals basis. Withholding tax of 19% (20% on 2015) is
generally deductible from interest paid although this is normally reduced or eliminated by a double
tax treaty. Since 2012 there are some limits to some financial expenses deduction.
LOSSES
From 1 January 2015 there is any time limit to carry forward the tax losses with future profits. The
carry forward of losses is not normally restricted by a change in the ownership of a company's
shares.
In 2015 there are some restrictions on how losses can be utilised. Up to 50% of taxable profit may be
off-set by companies with turnover between EUR 20,000,000 and EUR 60,000,000 and up to 25% of
taxable profits may be off-set by companies with turnover of more than EUR 60,000,000.
From 2016 all the companies will be allowed to off-set only the 70% positive tax basis with previous
year’s tax losses.
FOREIGN SOURCED INCOME
Under the International Fiscal Transparency regime, Spanish resident companies can be subject to
tax on profits earned by certain non-EU resident subsidiaries in which they have more than a 50%
interest. These rules apply to passive income earned by the subsidiary and taxed at a rate less than
75% than that which it would have been taxed if it had been earned by the Spanish resident
company.
INCENTIVES
A credit against tax payable may be taken for 25% of research and development expenses. Where
the expenses exceed the average amount incurred in the preceding two years, a credit equal to 42%
is available on the amount exceeding the average amount.
In addition there is a credit against tax payable of 12% of the cost of technological innovation of
existing products.
Industrial development banks and companies and venture capital companies and funds are subject
to special tax regimes.
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C. FOREIGN TAX RELIEF
Foreign taxes may be credited against Spanish Corporation Tax regardless of whether a tax treaty
exists with the foreign country. There is no system of global foreign tax credited. Under certain
circumstances, profits arising in permanent establishments of Spanish companies may be exempt
from Spanish tax if they have suffered a similar tax overseas.
Foreign tax credits are not available for the underlying taxes which the foreign company pays on the
profits.
D. CORPORATE GROUPS
Permission may be obtained from the tax authorities to consolidate the results of a group of
companies for corporate income tax purposes. The group must be headed by a Spanish resident
company which directly or indirectly owns more than 75% of its subsidiaries. All subsidiaries must be
Spanish resident companies.
The result of consolidation is that all income, gains and losses of the group are brought together for
tax purposes.
E. RELATED PARTY TRANSACTIONS
For tax purposes, transactions between related companies will be treated as if they had been made
at arm's length prices.
In certain cases (if certain thresholds are exceeded), the companies must disclose related parties
transactions made during the year in the annual corporate tax form.
F. WITHHOLDING TAX
Withholding taxes paid to Spanish resident companies must generally be deducted from dividends
and interest at 19% (20% on 2015) and from royalties at 24%. A 0% rate applies to royalties paid to
associated EU resident companies.
There are also withholding taxes payable on technical assistance fees and management fees payable
to non-residents.
All types of interest paid to EU resident companies (excluding Cyprus holding companies) are
exempt.
G. EXCHANGE CONTROLS
In principle, all direct investments into Spain require previous verification by the Direccion General
del Tesoro y Polftica Financiera (DGTPF). Outward direct investments also require approval by the
DGTPF.
H. PERSONAL TAX
Individual residents are liable to Personal Income Tax (IRPF) in respect of their worldwide income.
Non-residents are liable to IRPF only on their Spanish sourced income.
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Spain
An individual is deemed to be resident for tax purposes if:
(i)
He or she stays in Spain for more than 183 days in any calendar year;
(ii) His or her centre of vital interests is in Spain;
(iii) His or her spouse and minor dependent children qualify as residents of Spain. Fringe benefits in
cash or kind constitute employment income. Ordinary gains and losses are treated as ordinary
income.
All businessmen and self-employed professionals are required to file quarterly returns and make
advance payments by 20 April, 20 July and 20 October of the current year and 30 January of the next
year on account of final income tax liability for the current year.
All resident employees and self-employed individuals must register and pay monthly contributions
to the Spanish social security system. The general rate of the employee's general social security
contributions is 6.35% and the employer's contribution is 30.15%.
The current tax rates for taxpayers are as follows:
Tax Basis
(EUR)
2015
Tax Rate
2016
Tax Rate
Up to 12.450
20%
19%
From 12.450 up to 20.200
25%
24%
From 20.200 up to 35.200
31%
30%
From 35.200 up to 60.000
39%
37%
From 60.000
47%
45%
The current tax rates for savings incomes are as follows:
Tax Basis
(EUR)
2015
Tax Rate
2016
Tax Rate
Up to 6.000
20%
19%
From 6.000 up to 50.000
22%
21%
From 50.000
24%
23%
Usually when earned income is less than EUR 22,000 the individual is not obliged to prepare a tax
return. Resident individuals were subject to net wealth tax in respect of their worldwide assets.
The different autonomous governments can establish different reductions (e.g. Madrid).
Inheritance tax is also levied on the recipient of property passing by way of gift or death.
The tax rate for inheritance can be chargeable in a progressive rate, from 0% to 34%from father to
son, and increased rates in other cases.
The rate is determined with reference to the total value of assets gifted to each beneficiary.
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Spain
I. TREATY AND NON-TREATY WITHHOLDING TAX RATES
General
Non treaty-countries
Dividends
Parent-Subsidiary
%
Minimum
Share
Rate
19%¹
Interest
Fees
19%¹
19%¹
Treaty countries:
Albania
10
75/10
0/5
0/6
0
Algeria
15
10
5
0/5
7/14
Argentina
15
25
10
0/12
3/5/10/15
Armenia
10
25
0
5
5/10
Australia
15
-
-
10
10
Austria
15
50
10
5
5
Azerbaijan (USSR Treaty)
18
-
-
0
5
Barbados
5
25
0
0
0
Belarus (USSR Treaty)
18
-
-
0
5
Belgium
15
25
-
0/10
5
10
25
-
0/15
15/0
Bosnia and Herzegovina
10
20
5
0/7
7
Brazil
10
-
-
0/10/15
10/12,5
Bulgaria
15
25
5
0
0
Canada
15
-
-
15
0/10
Czech Republic
15
25
5
0
0/5
Chile
10
20
5
5/15
5/10
China
10
-
-
10
10
Colombia
5
20
0
0/10
10
Costa Rica
12
20
5
0/5/10
10
Croatia
15
25
0
0
8
Cuba
5
25
-
10
0/5
10
-
-
10/15
5/8/15
Ecuador
15
-
-
5/10
5/10
Egypt
12
25
9
0/10
12
El Salvador
12
50
0
0/10
10
Estonia
15
25
5
0/10
5/10
Bolivia
Denmark (Denounced 01/01/2009)
East Timor
(Treaty of Thailand)
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Spain
General
Dividends
Parent-Subsidiary
%
Minimum
Share
Rate
25
10
Interest
10
Fees
0/5
Finland
15
France
15
10
0
0/10
0/5
Georgia
10
10
0
0
0
Germany
10
10
5
0
0
Greece
10
25
5
0/8
6
Hong Kong
10
25
0
0/5
5
Hungary
15
25
5
0
0
Iceland
15
25
5
0/5
5
India
15
-
-
0/15
10/20
Indonesia
15
25
10
0/10
10
Iran
10
20
5
0/7,5
5
Ireland
15
25
-
0/10
5/8/10
Israel
10
-
-
0/5/10
5/7
Italy
15
-
-
0/12
4/8
Jamaica
10
25
5
0/10
10
Japan
15
25
10
10
10
Kazakhstan
15
10
5
0/10
10
Korea
15
25
10
0/8/10
10
Kuwait
5
10
0
0
5
18
-
-
0
5
Latvia
15
25
5
0/10
5/10
Lithuania
15
25
5
0/10
5/10
Luxembourg
15
25
10
0/10
10
Macedonia
15
10
5
0/5
5
Malaysia
5
5
0
0/10
5/7
Malta
5
25
0
0
0
Mexico
15
25
5
0/10/15
0/10
Moldova
10
25/50
5/0
0/5
8
Morocco
15
25
10
10
5/10
The Netherlands
15
25/50
5/10
10
6
New Zealand
15
-
-
0/10
10
Norway
15
25
10
10
5
Kyrgyzstan
(USSR Treaty)
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Spain
General
Dividends
Parent-Subsidiary
%
Minimum
Share
Rate
25/50
7,5/5
Interest
0/10
Fees
7,5
Pakistan
10
Panama
10
40/80
5/10
0/5
5
Philippines
15
10
10
0/10/15
10/15/20
Poland
15
25
5
0
0/10
Portugal
15
25
10
15
5
Romania
15
25
10
10
10
5/10/15
-
-
5
5
Former USSR
18
-
-
0
5
Saudi Arabia
15
25
0
0/5
8
Serbia
10
25
5
0/10
5/10
Singapore
5
10
0
0/5
5
Slovak Republic
15
25
5
0
0/5
Slovenia
15
25
5
0/5
5
South Africa
15
25
5
0/5
5
Sweden
15
50
10
15
10
Switzerland
15
10
0
0
5/0
18
-
-
0
5
Thailand
10
-
-
0/10/15
5/8/15
Trinidad and Tobago
10
25/50
5/0
0/8
5
Tunisia
15
50
5
5/10
10
Turkey
15
25
5
10/15
10
5/15
10
-
0
0
15
10
10
12
10
Russian Federation
Tajikistan
(USSR Treaty)
United Arab Emirates
United Kingdom
United States (Signed on January 2013, not in force yet)
Uruguay
5
75
0
0/5
5/10
10
25
5
0
5
Venezuela
10
25
0
0/4,95/10
5
Vietnam
15
25/50
7/10
10
10
Uzbekistan
(USSR Treaty)
NOTES:
1.
19% (20% for 2015) for EEC countries and 24% for non EEC Countries.
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Spain
*
Currently the Treaties between Spain and Oman, Nigeria, Namibia and Belarus are in the
pipeline.
*
Spain is working with a view to publish new Treaties with India.
*
Treaties with United States of America and Uzbekistan have been signed but they are not
applicable at this time.
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