The corporate tax rate in Spain has traditionally been 35%. Since 2007 the highest tax rate (for a standard company) is 30%.
Despite this standard tax rate of 30%, the Small and Medium companies only pay a tax rate of 25%.
Apart from the above mentioned ones, Spain currently offers very competitive tax rates for some companies, under certain conditions, reaching in some cases rates of only 15% and 20%.
In addition to these reduced rates, the companies can also apply for some deductions and other tax reliefs over the tax rate (for instance for new investments or for R&D, among others), allowing them to have very interesting effective fiscal ratios, the Spanish companies thus becoming entities as attractive as others much better-known in other European jurisdictions.
Nowadays, with the beginning of the recovery from the economic crisis, Spain’s position within the EU enables an increasing number of commercial transactions, taking advantage of the application of the European Directives.
Moreover, it must be stressed out that Spain banks on a large number of tax treaties: in this sense, we can mention, among other world regions, the treaties reached with Latin American countries, allowing to Spain to be an excellent channel of investments for global companies in Europe and America.
Besides, we also have to mention as another advantage of Spain the existence of a holding company (ETVE) that offers equivalent tax advantages as other popular holding companies existing in other traditional jurisdictions.
For all these reasons, Spain has never stopped to be an excellent place for investments, but it will keep improving even more.
by José María Moyano, Partner, Head of Tax Law Dept.