One of the reasons why companies and investors choose to locate in Catalonia is our competitive and pro-business tax system. Spain levies less tax than the majority of EU member states: at 34.6%, Spain is 5.4% points below the EU average (40.0%), in terms of the contribution to GDP. Moreover, Spain has signed a wide amount of taxation agreements aimed to eliminate double taxation.
Main Direct Taxes
- Corporate Income Tax applies to income obtained by entities and individuals that are tax resident in Spain. The general tax rate is 25% and can be noticeably reduced when certain legally established tax benefits, such as those affecting R&D, innovation and creation of work.
- Non-Resident Income Tax applies to any income earned in Spain by legal entities or individuals that are not resident in Spain. The general tax rate is 24% (19% for EU citizens or residents in the European Economic Area) and there is a reduced rate of 19% on income classified as interest, dividends or capital gains. However, the general rate can be reduced due to the large number of double taxation treaties that are in place and to the EU membership of Spain.
- Personal Income Tax applies to income obtained by individuals who qualify as taxpayers and who, as a rule, are residents in Spain. It is considered a dual tax, as it differentiates between general income and savings income. Thus, the scale for the general tax base for personal income tax for 2017 ranges from 21.5% to 48%, while the tax base for savings income is taxed at a maximum rate of 23%.
Main Indirect Taxes
- Value Added Tax applies to the acquisition of goods and services. The cost is borne by the final consumer and it is neutral for companies and professionals, who collect and pay the amounts charged as result of their transactions, and deduce the corresponding amounts of VAT borne. VAT legislation is harmonized under the EU and uniform mechanisms have been established for the recovery of Spanish VAT borne by non-resident entities in Spain, as well as VAT borne in the EU by a Spanish entity. The general tax rate is 21%, but reduced rates of 10% and 4% will apply to specific operations.
- Transfer Tax, Capital Duty Tax and Stamp Duty Tax is an indirect tax that will apply upon certain transactions performed by a natural or legal person. It is configured with three different modalities, each of which will tax determinate operations at a certain tax rate, from 1% to 10%.