Company tax in Spain. Losses from previous fiscal years

SPANISH COMPANY TAXThe time limit to compensate the negative tax bases of the company tax in Spain generated by the losses from previous tax years has changed drastically by the law 27/2014.

New measures are being taken in the law 27/2014: compensation of negative tax bases:

How compensation of negative tax bases is being dealt with, is set forth in article 26 of the law 27/2014 and this now changes substantially. These tax bases will be applied without any time limit in the future.  In other words, negative tax bases generated since 1997 may be compensated from now onwards. Congratulations!

There is however a quantity limit of 70% of the tax base prior to compensation. But then again, a compensation of 100% is allowed in case the minimum amount is 1 million euros.

Keep your issued and received invoices in Spain:


Decrease of the scale of Income tax in Spain (IRPF)

INCOME TAX IN SPAINCongratulations! The decrease of the scale of Income tax for Natural persons for the year 2016 will be applied already in 2015.

We already talked about the scales of tax percentages of the income tax for the year 2014, 2015 and 2016 in our article of 11.05.2015. Nevertheless, the government has decided to apply this reduction already in the month of July 2015. This means that in our tax return of the year 2015, we have to apply already the percentage that was foreseen for the year 2016. In the same fiscal year, not one scales will be applied.

Taxation on savings income in Spain as from 11.07.2015

taxation in malaga spainOn 29.06.2015 we have published an article referring to the taxation on savings income 2015, Income tax 2015, Taxation on savings income 2015, but this has been cancelled by a new Royal Decree published in the Spanish Official State Gazette in which it was decided to decrease this tax.

On the 11th July 2015 a Royal Decree was published in the Spanish Official State Gazette in which urgent measures were taken to decrease the tax for all tax payers related to the Income Tax for Natural Persons amongst others.

Good news also for the residents in Spain for whom the taxes on savings income had already been reduced.  

All you need to know about  the President and Administrator at the Community of Owners in Spain

president at a community of owners in Spain The Spanish community of owners in Spain is governed by the Owners General Assembly, the President and where applicable, the Vice-Presidents, the Secretary and the Administrator.

The President is appointed among the owners by community vote or, when not achieved, by drawing lots.

The acceptance of the charge is compulsory, although the designated owner may apply to the Judge in Spain for his replacement. This application must be presented to the Spanish Court within one month since his access to the position.  The judge will decide on such request, also appointing the owner who should replace the President in its position.

The President shall have the task of representing the community, both in and out of Court in all matters related thereto.

Inheritance in Spain (III)

Inheritance in MarbellaThis is our third article we are publishing related to the reduction of inheritance tax in Spain and specifically in Andalusia. This time, we wish to inform you about the reduction in the Autonomous Community of Andalusia when the same property is being inherited consecutively.

Previous articles:

1) Reductions on the inheritance tax for acquisition of a company, business or shares in Spanish companies, as well as Reduction for acquisition of habitual residence.

2) Reduction by relatives of the testator and the reduction of the autonomous community.

Reduction for consecutive transfers mortis causa of the same property

Inheritance in Spain (II)

 Spanish inheritance in MarbellaReductions on the inheritance tax in Spain and specifically in Andalusia for acquisition of a company, business or shares in Spanish companies, as well as Reduction for acquisition of habitual residence.

In our previous articles (SEE… ), we have already informed you about the general reductions and bonuses on these reductions as well as additional reductions to be taken into account for the calculation of the inheritance and gift tax in Spain and specifically in Andalusia.

Reduction for acquisition of a single-shareholder company, professional businesses, or shares in a company.

Reduction of 95% for acquisition mortis causa of a single-shareholder company, professional businesses, or shares in exempt companies, by spouses, descendants or adopted children of the deceased (in case there are none, by ascendants, adopters and relatives up to the third degree) provided that they stay the owner for a period of ten years after the death of the testator.

With regard to autonomic bonuses, the aforesaid period of 10 years is reduced to 5 years, and the reduction is lowered to 99%, leaving 1% of taxations for the mere statistic purposes in case:

The compensation councils in Spain (“junta de compensación”)

Keys to new home in SpainThe definition of compensation councils in Spain is set out in the Spanish Royal Decree 3288/1978.

The urban planning must be executed in essence by the Administration of the State, the local entities, the special urban entities and in particular all individuals.

The compensation councils are created to develop a certain area of the town in Spain. They have their own administrative board and have legal personality.

The interesting parties create these compensation councils to create a system so that all owners of plots that fall under a certain urban plan, can exercise the public functions in favour of the general interest of all the owners.

The Spanish fiscal consequences of the original contribution of the plots to the compensation councils depend on the fact whether the compensation councils act as trustee or not:

Kind of heirs. Three parts of an inheritance in Spain. How to disinherit a child or spouse in Spain

heirs in SpainAccording to Spanish legislation, there are three types of heirs:

Voluntary heirs:

Those appointed in the will. Should they come to decease before the testator, the right to inherit will not be passed on to their descendants.

Heirs entitled to a reserved share:

Corporate tax in Spain. Total and partial exemptions

company tax in Spain

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.


Regulation of European Union in matters of succession. European Certificate of succession. III

Inheritance in SpainInheritance, Wills and succession in Spain

REGULATION (EU) No 650/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 4 July 2012, on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession

Unified version of E.U Certification of Succession


Whereas 18 of the Regulations states that the European Certificate of Succession issued under this Regulation should constitute a valid document for the recording of succession property in a register of a Member State. This should not preclude the authorities involved in the registration from asking the person applying for registration to provide such additional information, or to present such additional documents, as are required under the law of the Member State in which the register is kept, for instance information or documents relating to the payment of revenue. The competent authority may indicate to the person applying for registration how the missing information or documents can be provided

The Certificate of succession is for use by heirs, legatees having direct rights in the succession and executors of wills or administrators of the estate who, in another Member State, need to invoke their status or to exercise respectively their rights as heirs or legatees and/or their powers as executors of wills or administrators of the estate.