Corporation tax is an important factor to consider when you have a company in Spain, and in terms of being able to plan your taxes. Whether you are a resident or a non-resident if you form part of a company in Spain, you will have to pay personal and company taxes. Personal taxes will be done annually and the company’s tax reports will be submitted every quarter, and then annually to the Commercial Registry (Mercantil).
The company apart from the name will be associated and identified with its tax code, or CIF in Spain. Every company in Spain must have a tax code and be registered with the tax authorities. The tax code allocated to the company is what is needed to issue all company invoicing and corresponding taxes. The companies CIF is also required to open a corporate bank account, import goods to Spain, acquire shares, and buy property. The CIF will have nothing to do with whether you have a fiscal presence in Spain or not, because you as a person are able to have a solely fiscal presence in Spain for financial purposes.
Corporate tax does differ from country to country, and Spain is no exception. In Spain the tax obligations, can depend of the size of the company and the origin of the revenue generated.
The general corporate tax is a national Spanish tax and as a company in Spain, with a standard activity your Corporate Tax may begin on a flat rate of 23% from year 2023.
It is essential to be informed in order to plan your finances correctly, when forming part of a company there are tax and accounting obligations that will have to be fulfilled.
ABAD law and accounting firm have at your disposal a fully qualified, professional and experienced team that will be able to take your tax worries off your hands and ensure that you don’t end up paying more than you need to, in any circumstance.
Corporation tax is an important factor to consider when you have a company in Spain, and in terms of being able to plan your taxes. Whether you are a resident or a non-resident if you form part of a company in Spain, you will have to pay personal and company taxes. Personal taxes will be filed annually and the company’s tax reports will be submitted every quarter, and then annually to the Commercial Registry (Mercantil).
The company apart from the name will be associated and identified with its tax code, or CIF in Spain. Every company in Spain must have a tax code and be registered with the tax authorities. The tax code allocated to the company is what is needed to issue all company invoicing and corresponding taxes. The companies CIF is also required to open a corporate bank account, import goods to Spain, acquire shares, and buy property. The CIF will have nothing to do with whether you have a fiscal presence in Spain or not, because you as a person are able to have a solely fiscal presence in Spain for financial purposes.
Corporate tax does differ from country to country, and Spain is no exception. In Spain the tax obligations, can depend of the size of the company and the origin of the revenue generated.
The general corporate tax is a national Spanish tax and as a company in Spain, with a standard activity your Corporate Tax may begin on a flat rate of 23% from year 2023.
It is essential to be informed in order to plan your finances correctly, when forming part of a company there are tax and accounting obligations that will have to be fulfilled.
ABAD law and accounting firm have at your disposal a fully qualified, professional and experienced team that will be able to take your tax worries off your hands and ensure that you don’t end up paying more than you need to, in any circumstance.
FAQs
Not in principle. But we would have to study your case and the objective of the purchase to confirm it.
In general, non-resident companies who purchase properties in Spain, through any legal means, are subject to a special levy on the Non resident tax, form 213. This form should be submitted during the month of January following the date the tax becomes due, which is 31st of December of each year. The companies whose country has signed an agreement to avoid double taxation with Spain are considered taxables but exempts from the tax. In order to apply the exemption, these companies must submit in the Tax Office where the asset is placed, along with the form, tax residence certificate of the foreign company and its partners. Therefore in your case you don´t have to pay the taxes but you would be obliges to declare them.
The best option is establish a Listed Investment Companies in the Property Market (SOCIMI). To that end, the Companies have to meet specific requirements (Art. 53 Corporate Income Tax Law):
- Offer eight o more houses for leasing, during a whole tax year.
- Any house to be considered under this regime must be offered for leasing continuously during three tax years.
- A separate account for every business and an adequate distribution of overhead expenses.
- The company may carry out other businesses, but 55% or more of the total income must be derived from leasing activities.
The main benefit of the regime is an 85% discount on the general Corporate Income tax rate, on the income arising from above activities. This means an effective rate of 4.5%..
The advantages are that:
- The purchase of shares primarily means not paying any transfer tax.
- The shares are freely transferable between the living and upon death according with the applicable legislation.
- The companies pay dividends each year if they obtain benefits and it is decided by Ordinary Shareholders. There is no liability to tax on dividends paid by a Gibraltar company to a person who is not resident in Gibraltar. There is also no withholding tax on dividends paid.
- In Gibraltar there are fiscal advantages. It is possible obtain a reduce tax rate. Companies are subject to taxation on income accrued in or derived from Gibraltar on the taxable profits for the financial year.
Regarding the purchase of the property through shares, this depends on your interests and your needs. The disadvantages is the cost of owning a Company in Gibraltar, the payment of the Special Tax on the Property for being owned by a Company of a Country without Double Taxation Agreement, etc. Normally this sort of international tax planning only have sense when you are talking about important investments.
Purchasing a property with an Spanish Company is a very good option if you are purchasing it as an investment to rent it. The Spanish Company will not be obliged to pay the Non Resident Tax, besides if you rent the property you can deduct all the expenses such us interest of the mortgage, furniture, maintenance cost, etc. so the taxation would be lower than if you hold it as a non resident person. Besides can have important advantages on the Inheritance Tax subject to conditions.
