The Law on corporate tax 27/2014 is the law applicable on the tax periods since 01.01.2015. As is usual, this law makes a distinction between companies with a total or partial exemption.
Companies that are exempted from corporate tax
In general, the income of companies that are exempted from this tax, have not been defined nor classified. In this kind of companies, their income is simply exempted.
These are mostly entities of the public sector that are totally exempted from this corporate tax and thus they are exempted from:
- The obligation to present their corporate tax refund.
- To pay withholdings on their income.
- To comply with the requirements regarding registers, accountancy, etc.
A few examples of these companies that are totally exempted from corporate tax:
- The Spanish state, autonomous communities and local entities.
- The Spanish Bank, Guarantee funds of deposits of credit entities.
- Management entities of the social security system.
- Entities that are partially exempted from this tax.
Special system for partial exemption of the corporate tax.
The difference with the general system is that the special system only makes a parital exemption of the corporate tax. This system stipulates exactly which income is being exempted.
- Professional associations: Services for the approval of a project for example are exempted but not the income from formation activities.
- Compensation council: They have legal personality. The compensation councils are created by the owners of plots with obligatory assignments so that urban facilities can be carried out. The compensation councils can be considered as entities partially exempted from corporate tax to the extent that they are non-profit associations. Should you wish to read more about these non-profit associations in Spain, just click here.
Do not hesitate to contact our expert team of accountants and fiscal advisors in Marbella if you are the owner or the director of a company. Our firm will offer you the best guarantees and will make sure you comply with Spanish legislation.
María Teresa Arcos, lawyer in Marbella.
Wim Lamers, accountant in Spain.