If your company operates in Spain—or is planning to—filing taxes isn’t just a compliance requirement. It’s a test of how well you understand the local playing field.
Spain’s tax system is known for its strict formalities, multiple filing obligations, and regional complexities. From VAT declarations and corporate tax returns to withholding obligations and intercompany reporting, the margin for error is small—and the cost of non-compliance can escalate quickly.
Whether you’re setting up a Spanish subsidiary, expanding operations, or managing cross-border flows, knowing how to file taxes in Spain—properly and strategically—is critical.
Why tax in Spain is a strategic matter (not just a legal one)
Treating Spanish tax filing as a routine compliance task may satisfy regulators—but it won’t unlock strategic value.
The structure you choose, the timing of your filings, and how you document your cross-border activity all impact:
- Your ability to repatriate profits.
- Your cost of compliance and legal exposure.
- Group-wide tax efficiencies.
- Internal audit readiness.
Because tax is interconnected with labor obligations, corporate law, and even foreign asset rules, companies that view tax as an isolated obligation often miss broader risks—and opportunities.
For a full view of the regulatory, cultural, and financial landscape, we recommend this essential guide on doing business in Spain.
The basics: Who needs to file taxes in Spain?
If you operate in Spain through a permanent establishment, a subsidiary, or even via remote employees, you’re likely required to file tax returns—regardless of your country of origin.
You’re subject to Spanish tax filing if you:
- Operate through a permanent establishment, branch, or subsidiary.
- Employ staff in Spain or work with freelancers.
- Provide digital services to Spanish customers.
- Rent or own property generating income.
- Are part of a foreign group with intercompany transactions affecting Spain.
In these cases, your company must:
- Obtain a NIF (tax ID).
- Register with the Agencia Tributaria (Spanish Tax Agency).
- Appoint a tax representative (if non-resident).
- Fulfill periodic and annual filing obligations.
If you’re still exploring the best way to establish your business locally, check out our step-by-step guide to on how to set up a company in Spain.
Core taxes for companies operating in Spain
Understanding which taxes apply is the foundation of compliance—and often where confusion begins for international companies.
Corporate Income Tax (Impuesto sobre Sociedades)
- Standard rate: 25%
- Reduced rate: 15% for qualifying new companies during the first two years with positive income.
- Filing deadline: Within 25 calendar days after six months from fiscal year-end (typically July 25).
- Form: Modelo 200 + advance payments (Modelo 202).
Value-Added Tax (IVA)
- Standard rate: 21%
- Reduced rates: 10% and 4% depending on goods/services.
- Filing frequency: Generally quarterly (Modelo 303), with annual recap (Modelo 390). Monthly if in REDEME.
- Additional forms: Modelo 349 for intra-EU operations; Modelo 340/347 for invoice detail and supplier/customer listings.
Withholding Tax
- Required on:
- Salaries (Modelo 111).
- Professional services and rent (Modelo 115).
- Dividends, interest, and royalties paid to non-residents (Modelo 216).
- Double Tax Treaties may reduce rates, but proper certification must be submitted to the authorities.
Local Business Tax (IAE)
- Applies to companies with turnover exceeding €1M.
- Based on business activity and location.
- First two years of operations are usually exempt.
Non-Resident Income Tax (IRNR)
- Applies to non-resident companies with income generated in Spain.
- Tax rate: Generally 24% (reduced to 19% for EU/EEA entities).
- Whether you have a permanent establishment affects both rate and reporting frequency.
How to file taxes in Spain: Step-by-step
This section translates regulation into practical action. Filing isn’t just about submitting forms—it’s about aligning your operations with Spanish norms.
1. Set Up Your Digital Identity
To interact with the tax authorities:
- Get your NIF.
- Obtain a digital certificate (via FNMT or accredited provider).
- Register for online filing on the Agencia Tributaria platform.
This enables secure digital submission of returns and communication with the tax office.
2. Align Your Accounting to Local Standards
Spain requires accounting under PGC (Plan General Contable), even for subsidiaries of multinationals.
Your company must:
- Maintain complete books in Spanish GAAP (Plan General de Contabilidad).
- Archive documentation electronically.
- Submit official ledgers and annual accounts to the Mercantile Registry.
3. File Corporate Tax (Modelo 200)
Due within 25 days of the 6-month period after the company’s fiscal year-end. That means if your year ends in December, you file by July 25.
Late or incorrect filings can lead to:
- Fines starting at €1,200.
- Increased scrutiny or audit.
- Reputational risk for group compliance.
4. Fulfill VAT Obligations (Modelo 303 + 390)
VAT returns are quarterly, with annual summaries. If you import, export, or do intra-EU transactions, you must also file:
- Modelo 349 (EU operations).
- Modelo 340/347 for detailed invoices.
5. Handle Cross-Border and Transfer Pricing Issues
If your Spanish entity is part of an international group, be prepared to:
- Document intercompany pricing.
- Justify value chains and service flows.
- Provide transfer pricing documentation if you exceed thresholds.
Spain’s tax authorities are increasingly vigilant on BEPS (Base Erosion and Profit Shifting) risks.
Common mistakes international companies make
Here’s where businesses typically run into trouble:
- Treating Spain like a copy-paste of their home jurisdiction.
- Missing IVA obligations on digital services or reverse charge mechanisms.
- Overlooking deadlines and thresholds for documentation.
- Ignoring Modelo 720 (foreign asset declaration), which can result in massive fines.
- Treating tax, labor, and commercial compliance separately—when in Spain, they’re deeply connected.
- Using non-specialized advisors unfamiliar with international structures.
These aren’t just oversights—they’re vulnerabilities.
Next step: Avoid surprises, gain control
Filing taxes in Spain doesn’t need to be a burden—if you understand the system, structure your operations well, and get expert support.
But if you’re treating it as an afterthought, you’re risking inefficiencies, fines, and missed opportunities to optimize.
Let’s build your tax strategy in Spain—so you can focus on growing your business, not navigating bureaucracy.
