Once your company is formed regardless of whether it was a new or ready-made, the company will be subject to various taxes throughout the year.
The general principal the taxation in Spain will depend of the company’s details. The nature of the company, that is the industry and sector the company belongs to will have some influence on Spanish taxation. Other factors that will come in to play with be the annual profit generated, and size of the company, of with the concept begin that the bigger the company, the higher the tax rate will be. The smaller the company is in terms of productivity and revenue will reduce the amount of taxes that the company will be subject to pay.
The starting rate for firms in Spain is 30%, which is very normal and can be reduced if the company complies with the set criteria. The current threshold for a 5% tax reduction is 300,000 Euros, at which the amount will be taxed at a 25% tax rate. Anything over 300,000 Euros is then taxed at the normal 30% flat rate.
One of a very interesting incentives offered currently by the Spanish government is a 10% tax reduction if the company is generating a lot of employment particularly new employment. This implies that if the company is creating employment in the area, then the company would be eligible their tax rate to be only 20%.
In addition to this incentive companies whose revenue is below 5 million a year are only tax 20% on the first 300,000 Euros and 25% for anything over.
For new companies with in that tax year the tax rate of the first 300,000 is only 15% and then 20% for anything generated over that amount.
Another interesting point, that is available at present, but will only be for a set amount of time, is a discount of 50 Euros off the social security self-employment payments. Currently the monthly cost of being self-employed is just over 250 Euros, which means that the final amount to pay would only be 200 Euros. This will of course only apply of a set period of time until, for example for the first few months, and only applies to new registration.
When a company make a purchase, of any sort an invoice is usually provided upon asking for it, which is where the company´s CIF number (tax identification code) will appear, so that the company may claim back the IVA (VAT).
The IVA (VAT) that can be claimed back is only so providing that the purchase made was in fact to do with and in relation with the activity of the company. The same rule can be applied to buying of property, as long as it is for commercial purposes, such as a warehouse, or an office for example.
ABAD ACCOUNTANTS are highly skilled and are constantly updating their knowledge to perform and give the best possible service to your clients, always keeping their interests in mind. It is an on going matter to help keep taxes at a minimum and that is exactly what the qualified professional do here at ABAD´S.