Corporate Tax in Spain: What International Businesses Should Know

Understanding Spain’s Corporate Tax System

If you’re planning to launch or operate a business in Spain, understanding Impuesto de Sociedades (Corporate Tax) is essential. Whether you’re opening a subsidiary, branch, or Spanish SL company, corporate tax affects profitability, cash flow, and legal compliance.

At Borderless Lawyers, we help businesses structure operations to minimize tax exposure while meeting all legal obligations under Spanish and EU law.

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📊 What Is Corporate Tax in Spain?

Corporate Tax (Impuesto sobre Sociedades) is levied on companies’ net profits. It applies to:

• Spanish-resident companies (on worldwide income)

• Non-resident entities with a permanent establishment in Spain (on Spanish-source income)

📌 All legal entities registered in Spain must file annual corporate tax returns—even if they don’t generate profit.

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🧾 Standard Tax Rates

✅ Startups may benefit from reduced rates, depending on the activity and eligibility under the Startups Law.

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📅 Corporate Tax Calendar

📌 Late filings can lead to significant fines and interest.

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💡 Deductions & Tax Benefits

Spanish tax law allows deductions for:

• Business-related expenses (staff, rent, supplies)

• R&D and innovation investments

• Environmental or energy-efficiency improvements

• Double taxation relief for foreign income

• Amortization and depreciation of assets

💼 We advise on tax planning strategies to reduce your effective tax burden while staying compliant.

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🌍 Corporate Tax for Foreign Companies

Foreign companies are taxed in Spain if they:

• Operate via a branch, office, or permanent staff

• Own real estate or other Spanish-based income assets

• Provide ongoing business activities in Spain

We help you:

• Determine if you have a permanent establishment

• Avoid double taxation using Spain’s international treaties

• File accurate declarations for non-resident tax obligations

📌 Spain has tax treaties with over 90 countries, including the U.S., UK, Canada, India, Japan, and UAE.

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🧑‍💼 Tax Filing Requirements

Every Spanish company must:

• Register with the Tax Agency (Agencia Tributaria)

• Obtain a CIF (corporate tax ID)

• Keep proper accounting and financial records

• Submit quarterly and annual declarations

🧾 We help prepare and file:

• Corporate Tax Return (Modelo 200)

• Payment on account (Modelo 202)

• VAT returns (Modelo 303) if applicable

• Annual summaries and balance sheets

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🚨 Common Pitfalls to Avoid

❌ Failing to declare worldwide income
❌ Misclassifying deductible expenses
❌ Missing the startup tax rate deadlines
❌ Ignoring transfer pricing rules for intercompany transactions
❌ Poor record-keeping or accounting compliance

📌 Our legal and accounting team audits and corrects errors before they trigger inspections or fines.

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💬 Real-World Example

Client: A U.S. SaaS company opened a tech hub in Barcelona. We advised on incorporating a Spanish SL, secured the 15% startup tax rate, and ensured all IP licensing structures met OECD transfer pricing requirements.

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🤝 How Borderless Lawyers Can Help

We provide:

• ✅ Entity structuring and tax registration

• ✅ Full corporate tax compliance and returns

• ✅ Advice on tax-efficient operations and treaties

• ✅ Cross-border planning and IP licensing

• ✅ Legal representation in tax audits or disputes

📞 Get in touch to schedule a consultation with our corporate tax and legal team.