Spain

Value-added tax (VAT)

Spanish VAT is payable on supplies of goods and services carried out in Spanish VAT territory and on imports/intra-EU acquisitions of goods and services. There are three rates for the different types of goods and services, which are as follows:

• Standard rate of 21%, for regular supplies of goods and services.
• Reduced rate of 10%, for necessities (e.g. food and agricultural products not included in the ‘super reduced’ 4% rate, dwellings, other qualifying services). Live cultural events and cinema tickets are taxed at the reduced rate of 10% too. 
• Super reduced rate of 4%, for basic necessities other than those classified under the reduced rate (e.g. bread, milk, books, medicine). 

Temporary reductions in rates can apply for specific reasons (e.g. for sanitary reasons, for economic reasons, etcetera). On the other hand, certain activities are VAT exempt , including, among others, financial and/or insurance activities, medical activities, educational services.. These activities do not grant the right to deduct input VAT..

Having said that, intra-EU supplies of goods and export of goods provided are VAT exempt and grant the right to deduct input VAT if certain requirements are met.

In the Canary Islands, a specific tax is applied instead of VAT, called the Canary Island General Indirect Tax (IGIC). IGIC is pretty similar to VAT although there are some differences, mainly in relation to the applicable rates that are normally lower than VAT. Guidelines given by the Spanish mainland authorities are normally also followed by the authorities in the Canary Islands .

In Ceuta and Melilla, a specific sales tax called IPSI is applied. IPSI has rules which are different from  VAT and, generally  its application is confined to  certain activities/taxable events

Customs duties

Goods imported into Spain from outside the European Union are subject to customs duties. The rates are established by the EU’s Common Customs Tariff and vary widely.

The amount of  duties payable mainly depends on three elements: (i) the tariff classification of the imported product, (ii) the country of origin of the product, and (iii) the customs value of the goods imported that is based on the price paid or payable for the  imported product (however, specific rules determine such value and positive/negative adjustments with respect to the price paid or payable must be taken into account).   

Excise duties

Excise duties are chargeable on the following products: alcohol, hydrocarbon, coal, tobacco, electricity and certain means of transport.

Excise duties are payable on the aforementioned products or products containing them. Payment of excise duties takes place when the products are produced/obtained in Spain and when they are brought into Spain from outside Spain (either via an intra-EU acquisition or import). Strict requirements are applicable in terms of compliance and formal obligations, e.g..  keeping stock records, transport documents, authorizations to be obtained from the Spanish Excise Duties Authorities, filing of tax returns, filing of communications of specific circumstances, etcetera. Tax rates normally vary depending on the kind of product and its use, and some reduced rates and exemptions may also apply. 

Tax on non-reusable plastic packaging (Plastic Packaging Tax)

On 1 January 2023, the Plastic Packaging Tax entered into force. The taxable event is the manufacture, intra-EU acquisition, and import of non-reusable plastic packaging. The definition seems to be quite broad as it would include any kind of packaging containing plastic, including packaging for containing, protecting, distributing, or handling goods.

The tax rate is EUR 0.45 per kilogram of plastic included in such packaging.

If the packaging is manufactured within Spain, the taxpayer will be the manufacturer, who will have to charge the Plastic Packaging Tax on the first supply of the packaging. In the case of the introduction of non-reusable plastic packaging via intra-EU acquisition or import, the taxpayer will be the entrepreneur or entity performing the intra-EU acquisition or import, who will have to pay the Plastic Packaging Tax via the filing of specific periodical returns (for intra-EU acquisitions of plastic packaging or goods containing plastic packaging) or the import Single Administrative Document (SAD) (for imports of plastic packaging or goods containing plastic packaging).

Different tax benefits can be applied depending on the specific circumstances, including the following, among others:

• Recycled plastic contained in the packaging would not be subject to the payment of the Plastic Packaging Tax.
• Plastic packaging sent outside Spanish territory (via intra-EU supplies or exports) can benefit from tax exemptions, deductions, or refunds.
• If a threshold of 5 kilograms per month is not exceeded in terms of the amount of plastic packaging introduced into Spain, the tax would not be due.
• Plastic packaging for certain products (e.g. medicines, healthcare products, inks, varnishes) can qualify for tax relief.
• Destruction or return of plastic packaging before its use.

For the effective application of the tax benefits, certain conditions have to be met and evidence should be provided to the tax authorities when necessary.

Tax on tax-haven-resident companies owning real estate in Spain

Companies resident in a tax haven for tax purposes that own real estate or hold real property rights in Spain are subject to a special levy accrued on 31 December and declared and paid in January of the following year in the place and manner established by law. The tax is 3% of the assessed value of the real estate.

Transfer tax

A transfer tax, with general rates of usually  4% t 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.

Transfers of listed or unlisted securities are, in principle, exempt from both transfer tax and VAT. This exemption does not apply for transfers of unlisted securities of a company on a secondary market that tries to evade the tax payable on a direct transfer of real estate that it owns. For this purpose, Spanish law establishes certain cases where it is understood that there is an intention to evade tax.

This exception does not apply to transfers of securities received as a result of the incorporation by banks of asset management companies and to transfers of securities of banks affected by the integration plans regulated by Law 9/2012, which will therefore be exempt from transfer tax. In addition, acquisitions of assets in the Canary Islands may be exempt from transfer tax (and from IGIC) when certain requirements are complied with.

Restructuring transactions are also exempt from transfer tax. For this purpose, mergers, spin-offs, exchanges of shares, and certain in-kind contributions are considered to be restructuring transactions.

Stamp duty

Stamp duty is mostly levied on notarial instruments and records documenting transactions that have an economic value and need to be registered in public registries (e.g. company, land, and industrial property registries). Stamp duty is incompatible with transfer tax and capital duty, but compatible with VAT. The general rate is between 0.75% and 1.5%, depending on the region of Spain and with special rates for different taxable events.

Stamp duty is also levied on certain commercial (e.g. bills of exchange, promissory notes), court, and administrative documents.

Capital duty

A 1% capital duty is levied on capital reductions and company dissolution and is payable by the shareholders.

Capital duty is incompatible with transfer tax and stamp duty in certain cases, but it is compatible with VAT.

Payroll taxes

Employers are required to withhold a percentage of their employees’ salaries and benefits as a payment on account of their personal income tax (PIT). The rate of withholding is a progressive rate of between 19% and 47%, depending on the employee’s personal circumstances and income.

Social security contributions

Employers are required to pay social security contributions. The rate of the contributions under the general social security contribution regime is the fixed rate of 30.48% plus a variable rate for occupational accidents (e.g. 1.5% for office work).

Employees are also required to pay social security contributions. Under the general social security contribution regime, the rate of social security contributions is 6.47%. Employers should deduct this amount from the amounts that they pay to employees.

The rates of social security contributions stated above should be applied to the employee’s total monthly gross employment income, whether in cash or in kind, with a minimum monthly contribution base of between EUR 1,323 and EUR 1,847.40and a maximum monthly contribution base of EUR 4,720.50 depending on the employee’s professional category.

Both parts of the social security contributions (employer and employee) should be paid by the employer to the Social Security Treasury.

Tax on the provision of certain digital services 

The provision of certain digital services (online advertising, online intermediary services, and data transmission services) involving users located in Spain is subject to a 3% tax.

Only those entities (Spanish tax resident or not) whose total income for the previous tax year exceeds EUR 750 million or those entities whose income from the provision of digital services carried out in Spanish territory in the previous tax year exceeds EUR 3 million will be considered taxpayers.

For entities belonging to a corporate group, the thresholds are determined at group level.

Tax on financial transfers

Onerous acquisitions of shares in listed Spanish companies with a capitalisation value at 1 December in the year prior to the acquisition of over EUR 1 billion are subject to the indirect tax on financial transfers.

The tax rate is 0.2% and is levied regardless of the place of residence of the parties or where the transaction takes place. Certain exemptions are established that mainly affect the primary market and the acquisitions necessary for the operation of market infrastructures, those relating to business restructurings, those made between companies of the same group, temporary assignments, and certain acquisitions of own shares.

Temporary levy on energy

The temporary levy on energy established for financial years 2023 and 2024 was repealed by Law 7/2024, passed on  20 December and establishes three taxes and amends various tax rules was published in the Spanish Official Gazette.

Tax on the interest and commission margins

The new tax on the interest and commission margin of certain financial institutions replaces the temporary levy on credit institutions and financial credit institutions. This tax will be applicable in the first three consecutive tax periods starting  1 January  2024.

It is a direct tax that taxes the interest and commission margin obtained by credit institutions, branches of foreign credit institutions and financial credit institutions as a result of their operations in Spanish territory.

The parties liable to this tax are credit institutions established in Spain, financial institutions and branches established in Spanish territory of foreign credit institutions.

The tax period will coincide with the taxpayer's financial year without exceeding 12 months, accruing on the last day of the calendar month following the end of the tax period.

The taxable income will consist of the positive balance resulting from integrating and offsetting the interest margin and  income and expenses from commissions resulting from the activity carried out in Spain recognised in the taxpayer’s profit and loss account or, where applicable,  income statement  for the tax period.

Taxable income will be the result of reducing  taxable income by the amount of EUR 100 million. In no event can    taxable income no be negative. This reduction will be prorated when the taxpayer's tax period is less than 12 months.

For the purposes of obtaining the full tax liability, the rates indicated in the following scale will be applied to the taxable income as a general rule, with an increase of 15% if structural modification operations have taken place and certain requirements are met

The net tax liability will be the result of reducing the positive gross tax liability by 25 for CIT or the NRIT liability.

When the profitability indicator relative to the taxpayer's total assets is lower than the reference value of 0.7 percent, an extraordinary deduction may be applied.

Local taxes

In addition to the taxes stated above, the following local taxes may be charged on companies:

• Real estate tax, levied annually by the local authorities on the ownership of real estate.
• Local tax levied on the increase in the value of urban land, chargeable when urban real estate is sold.
• Motor vehicle tax, charged on the ownership of vehicles.
• Tax on constructions, installations, and building works, charged on the cost of certain works that require town planning licences.
• Waste collection fees.