SPANISH TAX ON VEHICLE (Impuesto de Circulación)

This local tax is based on the volume of the motor. The tax which ranges from 15 to 100 euros, is increased by a percentage in same cities with a bigger number of inhabitants. For an average car, it is about 60 euros a year, and it is only payable if you have a car registered on a Spanish licence plate.

This Spanish tax is paid once a year, normally in March/ April and the bill must be presented in the tax collecting municipal agency.

A car registered in one of the countries of the European Economical Space can be registered in Spain without paying IVA (VAT) or Customs.

SPANISH INHERITANCE TAX / GIFT TAX (Impuesto de Sucesiones)

Spanish inheritance tax is payable on the increase of wealth asset by the inheritor, obtained by reason of death.

Gift tax is based on the increase of wealth, produced by reason of gift while the transferor / donator is still living.

Who is responsible for paying this tax?

The tax is payable by the heirs or beneficiaries if they are residents and the assets are located in Spain

When and where the inheritance and gift tax have to be paid?

• Inheritance tax has to be paid the following six months after becoming the new Spanish property owner or receiving the assets, in accordance with the last will.
• Gift tax will be paid in the following 30 days after the date of the transfer.

These taxes will be paid at the Provincial Tax Office (Delegación Provincial of the Consejería de Economía y Hacienda) in your nearest town.

Reduction on the Inheritance tax:

The amount to deduct from the inheritance tax depends on the relation with the deceased. The conditions are:

• The inheritors (wife/husband, children or parent) are also residents in Spain (for at least 3 years)
• The property was the principal residence/family home of the deceased
• The inheritor will not sell the property for the next 10 years; If they sell it, they have to pay the inheritance tax.

You should ask for legal advice in regards to the tax liability and the maximum amount for this exemption. The amount to pay in taxes depends on the relationship with the deceased.

Applicable tax rate:

Group 1: children, adopted children, grandchildren, spouses, parents, grandparents (direct relatives).
Group 2: cousins, nieces, nephews, more distant relatives (descendants and ascendants).
Group 3: others, including unmarried couples.

COMPANY TAX (Impuesto de Sociedades)

Is a direct tax on corporate profits obtained within the taxation period, which normally coincides with the calendar year, unless a different period is stated in the company's articles of association.

In any of the cases the tax period cannot exceed 12 months. Spain's standard corporate income tax rate is 35%.
Small and medium size companies with yearly sales of less than 3 million euros may qualify for certain tax incentives:

• Tax rate of 30% applicable to the first 90,000 euros of taxable income.
• Accelerated depreciation of certain fixed assets.
• 10% tax credit for investments and cost in internet, information technology, and communications.
  

BUSINESS TAX (I.A.E. Impuesto de Actividades Económicas)

Annual tax to be paid on the exercise of a business, professional, or artistic activity.