rates and allowances 2010
 
 
 

Income Tax
Company Tax
Rates And Allowances
Property Related Tax
UK-Spain Double Tax Treaty

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Income Tax Rates for the year ended 31st December 2010
From (euro) To (euro) State % Local % Total %
0 17,707 15.66 8.34 24
17,707 33,007 18.27 9.73 28
33,007 53,407 24.14 12.86 37
53,407 + 27.13 15.87 43


C
apital gains for individuals

The rate of taxation is 19%.

 

Company Tax Rates

 Please see our company tax page.

 

Regime for small companies (turnover less than 1.5m euro)

Free amortisations:

Investments which increase no of personnel                                                                                                         Assets worth less than 601 euro

Increased amortisations:

New fixed assets, maximum depreciation multiplied by 1.5

Bad debt allowance:

1% of trade debtors

Permanent rollover relief:

For reinvestment in same class of asset, 1 year before to 3 years after disposal


Wealth Tax (Patrimonio)

As of 1st January 2009, Spain has abolished Wealth Tax.


 

Allowable Depreciation
Straight line method can be used for any depreciable asset.
Reducing balance method can be used for new tangible assets with estimated useful life of at least 3 years
  Maximum straight Line rate % Maximum Useful Life years
Buildings and other constructions 3 68
Tools 30 8
Motor vehicles 16 14
Fixtures & Fittings / Office Equipment 10 20
Machinery 12 18
Computers 26 10
Depreciation must be recorded in accounts to be deductible.
And within above limits, except:
Accelerated allowance may be granted for new assets located in Spain, where it can be demonstrated that actual depreciation took place.


Other significant taxes

Tax on holding companies of Spanish real estate resident in non-treaty countries:

Penalty tax at 3% Cadastral value

 

Capital Gains Indexation Allowances for tangible fixed assets
Date Of Purchase Companies Individuals
Before 1984 2.2719 Reduction in indexed gain of 11.1% for each year or part year owned before 31/12/96 (applies to non-residents as well)
1984 2.0630
1985 1.9052
1986 1.7937
1987 1.7087
1988 1.6324
1989 1.5612
1990 1.5001
1991 1.4488
1992 1.4167
1993 1.3982
1994 1.3730 1.2780 and previous years
1995 1.3180 1.3502
1996 1.2553 1.3040
1997 1.2273 1.2780
1998 1.2114 1.2532
1999 1.2030 1.2307
2000 1.1969 1.2070
2001 1.1722 1.1833
2002 1.1580 1.1601
2003 1.1385 1.1374
2004 1.1276 1.1150
2005 1.1127 1.0932
2006 1.0908 1.0718
2007 1.0674 1.0508
2008
1.0343
1.0302
2009
1.0120
1.0100
2010
1.0000
1.0000


Income Tax Declaration threshold


If either of the limits below are exceeded, the taxpayer must file an annual tax return.

-  Income from employment 22,000 euro
-  Capital gains and savings income 1,600 euro
-  Rental income 1,000 euro
 

VAT (IVA)

From 1st July 2010, the standard and reduced rates of VAT will be increased:

Standard rate (Tipo General):                                    18%
Reduced rate (Tipo Reducido)                                    8%
Super-reduced rate (Tipo Superreducido)                4%  (unchanged)

Payment is quarterly, in general within 20 days of month end
A monthly regime applies for businesses with turnover above 6 million euro.

There is a pro-rated partially exempt calculation for businesses making both taxable and exempt supplies.


Exemptions

  Public services
  Financial transactions
  Public postal services
  Insurance Transactions
  Medical and health service
  Conveyance of land designated as not for housing
  Welfare
  Resale of property
  Education
  Private lettings
  Sport
  Exemptions for internal transactions
  Certain cultural activities
  Exemptions for exports


Deductibility of VAT

VAT incurred in relation to taxable goods and services is recoverable

Non-recoverable VAT

50% of motor vehicle cost.
Travelling expenses which are not deductible for corporation or income tax purposes.


Special Systems

  If turnover less than 200,000 euros the sistema de estimacion objetiva may be used.
  Agriculture, stock breeding and fishing
  Second-hand goods, art objects and antiques
  Travel agents
  Retail trade - recargo de equivalencia - net VAT per model paid to suppliers, not Hacienda

VAT on property
New homes

 
VAT
AJD (stamp duty)
Second hand homes
ITP
(property transfer tax)
Commercial premises & plots
Villa plots from promoter


VAT
AJD
ITP/ AJD rates can vary according to area (Comunidad Autonomo).


These notes are intended as a guideline and should not be used as a substitute for proper professional advice. Please contact us and we will be happy to assist you.



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