TKEG Expat™ (Test) Spain Corporate Tax Guide

Spain's general corporate income tax rate is 25%. Newly created companies may apply a 15% tax rate in their first profitable tax period and the following one, subject to conditions. Start-up companies qualifying under Spanish law may apply a 15% rate in the first tax period with positive taxable income and the following three periods. From 2025, reduced rates progressively apply to qualifying SMEs (down to 21%) and micro-enterprises (down to 17% on income up to EUR 50,000).

Spain’s standard VAT rate is 21%. Reduced rates of 10% and 4% apply to certain goods and services. In the Canary Islands, IGIC applies instead of VAT, and in Ceuta and Melilla, local sales tax applies instead of VAT.

[b]Payroll Tax: [/b]
Employers must withhold a percentage of employees' wages and benefits to pay personal income tax. Depending on the employee's individual circumstances and income, the withholding tax rate ranges from 19% to 47%.

[b]Social security insurance: [/b]
[ml][ol][li indent=0 align=left]employers must contribute to social insurance. In the general social security contribution system, the fixed contribution rate is 29.9 per cent, plus occupational accident insurance (e.g. 1.5 per cent).[/li][li indent=0 align=left]employees are also required to contribute to social insurance. Under the general social security contribution system, the social insurance contribution rate is 6.35 per cent. This amount is deducted from the amount paid by the employer to the employee.[/li][li indent=0 align=left]The above-mentioned social insurance contribution rates shall apply to the employee's gross monthly gross employment income, whether in cash or in kind, with a minimum monthly contribution of €1,125.90 to €1,572,30 and a maximum monthly contribution base of €4,139.40. [/li][li indent=0 align=left]Both parts of social security payments (employer and employee) are paid jointly by the employer. [/li][/ol][/ml]

[b]Overview of import and export taxes:[/b]

Many imported goods from outside the EU are subject to customs duties and excise duties. The tariffs and rates applied to different goods vary widely and change frequently.

Excise duty is levied on certain consumer goods such as cigarettes, cigars, mineral oil, alcohol products. If it is used only as a raw material, no consumption tax is levied. If the goods are exported, the excise duty can be refunded.

A transfer tax, with general rates of usually 4% to 13% depending on the region (in some regions it is a scale), is generally levied on inter vivos transfers, including real estate transfers and real estate leases that are exempt from VAT. Second and subsequent transfers of buildings are exempt from VAT; consequently, they are, in principle, subject to transfer tax. Residential leases are exempt from VAT and therefore subject to transfer tax.