What are the council taxes for businesses in Spain
There are a series of council taxes for businesses that are compulsory for companies in Spain. It is essential to be familiar with them in order to complete the tax obligations of a company. Below, we assess the most important ones and their conditions.
Council taxes for businesses in Spain
In Spain, companies are subject to various municipal taxes, which are taxes levied by local councils or local entities. These taxes vary depending on the locality and the economic activity of the company. The following are some of the main municipal taxes to which companies are subject in Spain
Real Estate Tax (Impuesto sobre Bienes Inmuebles IBI)
This is one of the best known taxes. It is levied on the ownership of real estate, whether urban, rustic or with special characteristics. Companies owning real estate (offices, industrial buildings, commercial premises, etc.) must pay this tax on an annual basis. The taxable base is the cadastral value of the property, and the tax rate varies according to the municipality.
Tax on Economic Activities (Impuesto sobre Actividades Económicas IAE)
This tax is levied on the performance of any economic activity, whether industrial, commercial or professional, in Spanish territory. However, there are exemptions for companies with a volume of operations below a certain threshold (€ 1.000.000) and for those in their first two years of activity.
Tax on Constructions, Installations and Works (Impuesto sobre Construcciones, Instalaciones y Obras ICIO)
When a company carries out works on a property, whether it is a new construction or a refurbishment, it must pay this tax. It is calculated according to the real and effective cost of the construction, installation or work, and its rate varies according to the municipality.
Tax on Mechanical Traction Vehicles Impuesto sobre (Vehículos de Tracción Mecánica IVTM)
Companies that own vehicles (cars, lorries, vans, etc.) must pay this tax annually. The amount is determined according to the characteristics of the vehicle, such as its power or type of fuel.
Tax on the Increase in Value of Urban Land (Impuesto sobre Incremento de Valor de los Terrenos de Naturaleza Urbana)
This tax is applied when land is transferred, whether by sale, inheritance or donation. It is levied on the increase in value of the land since the last transfer. It is important to mention that there have been recent legislative and jurisprudential changes regarding this tax, especially in situations where there has been no increase in value.
Fees for the provision of services or the carrying out of activities
In addition to taxes, there are various municipal fees that companies may have to pay depending on their activity. These fees are levied for the private use or special use of the local public domain. Examples include fees for occupying the public highway (terraces, scaffolding, containers), for holding markets or for carrying out activities that require a municipal licence.
Fees for urban planning licences
Before carrying out certain activities or carrying out certain works, companies may need to obtain a planning permission. For the processing and granting of these licences, municipalities charge a fee.
It is essential that companies are well advised on tax matters and are aware of their tax obligations in the municipality where they operate. Municipal taxes can vary not only in rates and amounts, but also in exemptions and allowances, so it is essential to be up to date and plan ahead in order to comply with all obligations and take advantage of possible tax benefits.
Establishment of municipal taxes and payment
In Spain, municipal taxes for companies are established by the local councils or by the local entities themselves, based on the powers and framework granted by the Ley Reguladora de las Haciendas Locales and other state regulations. Although state legislation establishes the bases and structures of these taxes, it is the local councils who, within certain limits, set the tax rates and may offer rebates and exemptions according to their own tax by-laws.
For the payment of these taxes, the local councils issue receipts or settlements to companies, indicating the amount to be paid and the deadline for payment. Generally, taxes have established voluntary payment periods, and if they are paid outside these deadlines, surcharges and penalties may be imposed.
Payment can be made in several ways: in person at municipal offices or collaborating banks, or electronically through the payment platforms or portals set up by the council itself. Many municipalities also offer the possibility of direct debit payments, thus facilitating the fulfilment of tax obligations and avoiding possible surcharges for late payment.
At Asesoría Orihuela Costa we take into account all the fiscal obligations of your company, our commitment is based on offering you comprehensive tax advice, so that you can focus on what really matters to you, your own company.
If you have any doubts, you can contact our team and ask for information about our tax and financial consultancy services for companies.
