🇪🇸 Business Taxes You Must File in Madrid
Whether you run a limited company or work as a freelancer in Madrid, your tax obligations include:
✅ National taxes (corporate tax, VAT, personal income tax)
✅ Withholdings on payroll or contractor payments
✅ Local taxes specific to Madrid city
✅ Annual summaries and reporting to AEAT (tax authority)
📌 Spain’s digital tax system is enforced locally by Madrid’s offices of Agencia Tributaria (AEAT).
🏢 Corporate Income Tax (Impuesto de Sociedades)
| Who Pays? | All SL companies with or without revenue
| Rate | Standard: 25%
| First-year reduced rate| 15% (if new and eligible)
| Form | Modelo 200
| Filing Deadline | 6 months + 25 days from fiscal year-end
💡 Even if your company earned no income, you must file Modelo 200. Failure to do so triggers late penalties and audits.
💸 Value Added Tax (VAT / IVA)
| Who Pays? | Any VAT-registered business or freelancer
| Main Filings |
-
Modelo 303 – Quarterly VAT return
-
Modelo 390 – Annual summary (January)
-
Modelo 349 – For EU transactions
📎 Madrid businesses must file all VAT returns digitally using a firma digital (electronic certificate).
👥 Payroll & Withholdings (IRPF)
| Who Pays? | Employers and freelancers who hire others
| Key Forms |
-
Modelo 111 – Quarterly salary or invoice withholdings
-
Modelo 190 – Annual summary
-
Modelo 145 – Employee tax form
📌 You must deduct and pay IRPF from employee salaries or from payments to Spanish resident contractors.
🧍 Freelancer (Autónomo) Taxes in Madrid
| Tax Type | Form & Frequency |
|---|---|
| IRPF (income tax) | Modelo 130 – Quarterly |
| VAT (if applicable) | Modelo 303 – Quarterly |
| Annual summaries | Modelo 390, Modelo 190, Modelo 347 |
Freelancers pay tax on net income, not gross. We help track deductible expenses to minimize tax exposure.
🏙️ Local Madrid Business Taxes
1. IAE (Impuesto de Actividades Económicas)
-
Required if annual turnover > €1M
-
Local tax based on activity and location
-
All companies must register for IAE, even if exempt from payment
2. Basura Comercial (Commercial Waste Tax)
-
Charged annually by Madrid City Hall
-
Amount depends on size and type of premises
-
Applies to all physical business locations (offices, shops)
📅 Business Tax Calendar – Madrid
| Month | Tax Filing(s) |
|---|---|
| January | Modelo 111, 190, 390, 347, local taxes |
| April | Q1 Modelo 303, 130, 111 |
| July | Q2 Modelo 303, 130, 111 + Modelo 200 (corporate tax) |
| October | Q3 Modelo 303, 130, 111 |
| December | IAE renewals, final IRPF adjustments |
We offer year-round tax compliance services to avoid fines and late fees.
❌ Common Business Tax Errors in Madrid
⛔ Thinking you’re exempt if no income
⛔ Missing Modelo 200 corporate tax deadline
⛔ Forgetting to register for IAE
⛔ Filing VAT without a valid registration
⛔ Not deducting/payrolling IRPF for contractors
🧑💼 Our Madrid Business Tax Services
Borderless Lawyers helps:
✅ File quarterly and annual Modelo tax forms
✅ Register and file IAE and local Madrid taxes
✅ Apply for digital certificates (firma digital)
✅ Handle tax queries or audits from AEAT
✅ Represent foreign company directors remotely
📞 File Your Madrid Business Taxes With Confidence
We support international clients, expat founders, and remote teams running companies or freelance operations in Madrid.
👉 Contact us to handle your full tax compliance in Madrid.