Taxation of Foreign Companies in Spain
Taxation of Foreign Companies in SpainUpdated on Wednesday 23rd August 2017
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The taxation system in Spain met several improvements and changes in January 2015, when the new tax reform came into force with the purpose of encouraging the foreign investments in the local economy which was affected in the years of the economic crisis. A new Corporate Income Tax Law was imposed by the Spanish government, alongside with a personal and non-resident income tax and VAT, the measures proving necessary in the foreign investment sector in Spain. For a better understanding of the new rules and regulations regarding the taxation of foreign companies, you can solicit legal support from our lawyers in Spain.
Important changes in the taxation system for foreign companies in Spain
The taxation for non-residents
A non-resident citizen who has a permanent establishment in Spain had to pay a standard income tax of 24.75%, but for certain types of incomes like dividends, interests and capital gains, the withholding tax rate was 21%. According to the tax reform, the standard income tax rate has decreased to 19%. These rates apply to foreign residents from the EU and EEA regions, but the other residents will pay the same rate - 24%. The withholding tax rate on dividends, interests and capital gains was reduced to 20% in 2015 and decreased to 19% in 2016. Other changes to the taxation system in Spain referred to the VAT, the taxation applied in the Canary Island, the environmental taxes, excise taxes etc.
The social security rate for foreign companies in Spain
Non-residents and taxes for property sale in Spain
If you need to find out more details about the changes of the taxation system in this country, you may contact our lawyers in Spain who can provide legal assistance and financial advice for foreign investors.