Taxes

An indispensable requirement for starting up your activity is to register with the Inland Revenue, to obtain your Tax ID Number (NIF), and to register for the Economic Activity Tax (IAE).

Economic Activity Tax (IAE)

The obligation to pay economic activity tax arises from running business, professional or artistic activities within municipal boundaries, whether or not these are within specific premises or specified in the tax rates.

All citizens, businesses or bodies carrying out economic activities must register with the Inland Revenue's Register for Businesses, Professionals and Withholders (form 036), although this tax need only be paid by businesses or bodies which carry out a business or artistic activity and whose previous two years' turnover was in excess of a million euros.
For example, a business that had a turnover of €1,200,000 in 2011 will have to pay the tax in 2013.

Declaracions d'alta, baixa o variació

Statements must be presented directly to the Spanish State Inland Revenue.

Registrations

If this concerns a registration for starting the activity within the municipality, the statements will have to be presented within a period of one month as from the commencement of the activity.

Natural or legal persons exempt from paying the tax will have to use form 036. Where any of their activities come under the economic activity tax, they will have to use form 840.

Where the necessary conditions are no longer met for an exemption, this will only have to be communicated to the State Inland Revenue (in form 848) when the net amount of the turnover has not been communicated in the statement for Corporate Tax i.e. in the following cases:

1. Credit institutions in insurance companies liable for Corporate Tax or Income Tax for Non-Residents with permanent establishments.
2. Partnerships or associations under Art. 35(4) of the General Tax Act (LGT): The following circumstances shall be deemed tax liable: unsettled estates; joint ownership and other associations which, for want of legal personality, constitute an economic unit or separate estate that is liable for tax.
3. Company groups.

Cancellations

Where this is a cancellation owing to cessation of activity, the statement must be presented within one month as from the date on which the activity ended.

Persons exempt from payment of the tax will have to use form 036. Where any of their activities come under the economic activity tax, they will have to use form 840.

Variations

Variation of the natural, economic or legal status (any change to the tax elements in excess of 20% will have to be declared). Variation statements must be presented within a period of one month as from the date on which the variation occurred, and will take effect in the year following the presentation of the statement.

Where the situation has not varied since the previous year, there is no need to present any statement.

Persons exempt from payment of the tax will have to use form 036. Where any of their activities come under the economic activity tax, they will have to use form 840.

Companies or organisations that belong to a group of companies that pay economic activity tax must present form 848 every year in order to give notice of the companies that belong to the group and the net amount of turnover of all the group's members, except where they have declared this amount in the statement for corporate tax, non-resident income tax or in form 184.

 

Exemptions

The following are exempted from paying economic activity tax

1. The following tax payers:

• Natural persons. This means that a natural person will never have to pay the tax irrespective of their turnover or the number of years they have been carrying out their activity.
• Legal persons or bodies that have a net turnover in the penultimate year of under one million euros.
• Non-resident income-tax payers operating in Spain through a permanent establishment, provided they have a net turnover of under a million euros.

2. Those that start their activities on Spanish territory are exempt for the first two years of their activity. This does not apply to natural persons because they are always exempt irrespective of the turnover or amount of time they have been carrying out their activity.
3. The Spanish State, its autonomous communities and local authorities, as well as the State's autonomous bodies, local bodies and bodies governed by public law analogous to autonomous communities.
4. The managing entities for Social Security and the mutual provident societies in the consolidated text of the Act on Regulating and Supervisin.
5. Public research bodies, teaching establishments at all levels provided these are wholly funded by money from the Spanish State, the Generalitat of Catalonia or local authorities, or by charitable or public-utility foundations, and non-profit teaching establishments at all levels come under the State-assisted system.
6. Non-profit associations and foundations for people with physical, mental and sensory disabilities.
7. The Spanish Red Cross.
8. Tax payers entitled to the application of the exemption under international treaties or agreements.
9. Non-profit bodies as provided for under Act 49/2002, of 23 December, on the Tax System for Non-Profit Bodies and Sponsorship Tax Incentives, and the regulations for applying the tax system of these bodies, as approved by Royal Decree 1270/2003, of 10 October.
10. Per a les entitats sense finalitat lucrativa (Llei 49/2002) s’entendrà feta la comunicació per la presentació davant de l’Administració Tributària del’Estat de la declaració censal d’alta, modificació i baixa en el cens d’empresaris, professionals i retenidors en que es faci constar la informació. Sortirà efectes a partir del període impositiu de l’any en que es presenta l’esmentada declaració censal.

The exemptions provided for must be applied for in a written document submitted to any of the City Council's registers. They will therefore only be awarded, where appropriate, if they have been applied for by the tax payer.

 

Registration-excluded activities

The following shall not be deemed to be an economic activity for the purposes of this tax:

1. The sale of items included in the companies' fixed assets which have been inventoried as landed property (for example, the company's head office) more than two years before the date of the conveyance. Nor shall the sale of the seller's assets of particular and private use be deemed to be an economic activity, provided that these have been used for an equal period of time.
2. The sale of products that are received as payment for personal work or professional services.
3. The display of items for the exclusive purpose of the establishment's decoration or ornaments. However, the display of items for use as gifts for clients shall be subject to this tax.
4. A single act or isolated operation of a retail sale. *

How is it processed?

Through the Inland Revenue

And for further information

• www.bcn.cat/hisenda
• 1.4 Tax Byelaw regulating the Economic Activity Tax (IAE) (PDF)
• Instructions and rates Legislative Royal Decree 1175/1990
• Spanish State Inland Revenue
• Royal Decree 243/1995, stipulating the regulations for the administration of the economic activity tax and governing the delegation of powers in the matter of that tax's registration management.

• 010
  Connection charge: € 0.47. Cost/minute: € 0.06. Charge per second. VAT included.
  Time: Monday - Sunday from 12 am to 12 pm.
• 807 117 700
  From outside the Barcelona Metropolitan Area.
  Connection charge: € 0.11. Cost/minute: € 0.41. Charge per second. VAT included
  Time: Monday - Sunday from 12 am to 12 pm.
• 900 226 226
  For bank-card payments and standing orders (freephone).
  Time: Monday - Sunday, from 8 am to 12 pm.

 

Cessation of the activity

The cancellation of liability for the tax must be presented within the period of one month as from the cessation of the activity.

Before processing the cancellation of liability for waste-collection tax at Barcelona City Council, applicants must visit the Spanish State Inland Revenue and cancel their registration with the Register for Businesses, Professionals and Withholders and their liability for Economic Activity Tax.

How is it processed?

Through the Municipal Tax Office

And for further information

• Byelaw regulating Public Prices for collecting commercial and industrial waste that can be assimilated into municipal refuse
• Spanish State Inland Revenue

• 010
  Connection charge: € 0,47. Cost/minute: € 0,06. Charge per second. VAT included.
  Time: Monday - Sunday from 12 am to 12 pm.
• 807 117 700
  From outside the Barcelona Metropolitan Area.
  Connection charge: € 0,11. Cost/minute: € 0,41. Charge per second. VAT included
  Time: Monday - Sunday from 12 am to 12 pm.
• 900 226 226
  For bank-card payments and standing orders (freephone).
  Time: Monday - Sunday, from 8 am to 12 pm.

 

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