Tax minimization in Spain is based on legal measures which allow local and foreign companies to reduce the level of taxes they have to pay. Tax minimization can be achieved through incentives offered by the state to local companies or through the double taxation treaty signedby two states. The government can also provide other types of tax minimization procedures; our company formation agents can offer you all the legal measures related to tax minimization in Spain.
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Tax minimization procedures in Spain
Non-resident individuals and companies are taxed only for the income they obtain throughout their business activities in Spain.
According to the Spanish law, a resident is a person who has been living for more than 183 days in Spain; also, if a person has business activities here, he or she can also be considered a resident.
Investors are invited to watch the next presentation for further details on the tax minimization procedures available in Spain:
A foreign investor in Spain should know that he or she has the right to choose if the corporate tax will be paid in Spain or in the country of origin, as long as Spain has signed a double taxation treaty with the respective state.
In 2015, the Spanish government has reduced the corporate tax rate from 30% to 28%, and starting with the beginning of 2016, the companies set up here will benefit of a new reduction for the corporate tax, which will be lowered to a rate of 25%.
Small and medium companies can benefit from a reduction of the income tax rate; our company formation specialists can provide further information on this tax measure. From the beginning of 2015, all new incorporated companies benefit of a corporate tax rate of 15%, applicable to the first two years of activity with taxable profits.
Corporate taxes in Spain
All Spanish incorporated companies have to pay the following taxes:
- company tax – is paid as a percentage of the profits obtained by the company;
- social security tax – paid by the employer for each employee working in the company;
- value added tax (VAT) – the standard VAT is established at a rate of 21%, but it may vary according to the field of activity; you can find out more on the VAT rates from our company formation specialists in Spain.
If you need further information on the tax minimization procedures available in Spain, please contact our Spanish company formation agents, who can offer you assistance upon this matter.