🧾 Business Taxes in Palma de Mallorca – Overview
Your business in Palma must follow national Spanish tax rules, enforced locally by the AEAT office in the Balearic Islands and coordinated with Palma’s city hall.
| Tax Type | Applies To | Filing Schedule |
|---|---|---|
| Corporate Tax (IS) | SL Companies | Annual (Modelo 200) |
| Personal Income Tax (IRPF) | Freelancers | Quarterly (Modelo 130), Annual (Modelo 100) |
| VAT (IVA) | Most business activities | Quarterly (Modelo 303), Annual (Modelo 390) |
| Withholding Tax (IRPF) | Employers & freelancers | Quarterly (Modelo 111), Annual (Modelo 190) |
| Informative Declarations | SLs & autónomos (if relevant) | Annual (Modelo 347) |
We handle all registrations, filings, and representation before Spanish tax authorities.
🏢 SL Companies – Corporate Obligations
| Item | Details |
|---|---|
| Corporate Tax Rate | 25% standard (15% for new SLs) |
| Filing Form | Modelo 200 (annual) |
| Advance Payments | Modelo 202 (quarterly) |
| Annual Accounts | Must be filed with Registro Mercantil de Palma |
| VAT Registration | Required unless exempt activity |
📌 Even inactive SL companies must submit yearly declarations and maintain bookkeeping.
👨💻 Freelancers (Autónomos) – Tax Compliance
Freelancers in Palma de Mallorca are individually liable for income tax and social contributions:
| Task | Form / Frequency |
|---|---|
| Register as autónomo | Modelo 036 / 037 |
| Pay quarterly IRPF | Modelo 130 (or Modelo 131) |
| File annual income tax | Modelo 100 |
| VAT declarations | Modelo 303 (quarterly), 390 (annual) |
| Social Security payments | Monthly, starting around €230 |
💡 New freelancers may be eligible for a flat rate (tarifa plana) social security contribution for the first 12–24 months.
📊 Bookkeeping & Accounting in Palma
| Business Type | Accounting System | Filing Duty |
|---|---|---|
| SL Companies | Full double-entry accounting (PGC) | Annual accounts & ledgers |
| Freelancers | Simplified ledgers (income, expenses) | Retain records for 4–6 years |
| All entities | Must issue proper Spanish invoices | With VAT and IRPF if applicable |
We use tools like Holded, Quipu, or Sage to offer seamless accounting with local compliance.
👥 Hiring Employees in Palma de Mallorca
Spain has detailed labor protections, and hiring in Palma must follow strict compliance:
| Requirement | Details |
|---|---|
| Employer registration | With Social Security and TGSS |
| Legal contract | In Spanish, filed with SEPE |
| Payroll & payslips | Monthly, with breakdowns of IRPF and SS |
| Withholding taxes | Modelo 111 (quarterly), Modelo 190 (annual) |
| Vacation & termination | Regulated by national labor law |
📌 Penalties for improper hiring can be steep — we ensure compliance from day one.
🏛️ Local Business Taxes in Palma
| Tax | Applies To |
|---|---|
| IAE (Economic Activities Tax) | Only for revenues > €1M annually |
| Commercial waste tax (basura) | Based on premises usage |
| Signage tax | For storefronts or visible outdoor branding |
| Opening licence (licencia de apertura) | Required for most physical locations |
We help register your activity and ensure you’re compliant with Palma’s Ayuntamiento.
❌ Tax Pitfalls to Avoid
⛔ Missing quarterly filings — penalties apply even for zero-income periods
⛔ Hiring staff without a registered contract
⛔ Assuming tourist-based services are exempt from VAT
⛔ Not joining Social Security on time
⛔ Using a personal account for SL-related expenses
🧑💼 Our Tax, Accounting & Hiring Services in Palma
Borderless Lawyers offers:
✅ NIE, CIF, Modelo 036/037 registrations
✅ Quarterly and annual tax filings (SL & autónomo)
✅ Bookkeeping and annual accounting
✅ Payroll setup and labor contracts
✅ Licensing and local tax registration with Palma authorities
✅ Bilingual support with all agencies
📞 Need Help Managing Taxes or Payroll in Palma de Mallorca?
We take the stress out of running your business — from bookkeeping to employee compliance.
👉 Contact us today to manage your business taxes and hiring in Palma de Mallorca.