A foreign investor who wants to carry out an economic activity in Spain dependent on a non-Spanish company has several ways of making such investment: set up a Spanish subsidiary company or through a permanent establishment. The first would have a legal structure equivalent to any other company incorporated in Spanish territory, while the permanent establishment has no legal personality and directly depends on a company located abroad.
On the other hand, in the tax field both forms of operating in Spain have the same tax obligations. In this article we will explain which obligations will have to face a subsidiary or a permanent establishment in Spain.
Quarterly and annual statements of VAT and IRPF
The VAT (Value Added Tax) is an indirect tax that falls on the consumer, although it is the company who acts as a tax collector for the Tax Agency. It must be declared on quarterly and annual forms.
The quarterly VAT declarations are settled between the 1st and 20th of the following month:
- The first quarter statement is made in April.
- The declaration of the second quarter is made in July.
- The third quarter statement is made in October.
- The fourth quarter statement is made in January.
In each quarter the form 303 of the VAT will have to be submitted, and the form 111 and 115 of the IRPF if you have employees or you are carrying out the activity in a rented space, taking aside any other specific forms depending on the activity of each company.
In case that day 20th is a non-working day, the term is extended until the next working day. For example, if the April 20st is a Saturday, you can settle the quarterly VAT statement until Monday, April 22nd , although to be able to set up a direct debit for the amounts to be paid, the limit is established (without changing due to falling in order to week) on day 15.
In addition to the quarterly statements, you must also submit an annual summary statement during the first 30 days of January.
Corporate Tax
Corporate Tax is a personal and direct tax that taxes the obtaining of income by companies and other entities residing in Spanish territory, such as subsidiaries and permanent establishments.
The Form 200 is the annual statement of Corporate Tax. It must be submitted between July 1st and July 25th of each year, in the event that the tax period of the company coincides with the calendar year. It is mandatory to file it even if no activity has been developed or no income has been obtained.
If there was an amount to pay the last declaration of the Form 200 or if it is a big company, the Corporate Tax Pre-payment – Form 202 – should be submitted. It has to be filed in April, October and December.
Annual accounts
Subsidiary companies or companies with a permanent establishment in Spain are also obliged to present their annual accounts at the Registro Mercantil once a year. Specifically, we must present:
- The balance sheet.
- The memory.
- The profit and losses account.
- The statement of changes in equity.
- The cash flow statement.
The maximum date to submit the annual accounts is up to one month after its approval at the Ordinary General Shareholders’ Meeting, that means period that ends on July 30 of the following year.
If you need advice to carry out any of these procedures in Spain, contact GM Tax. We manage all your obligations with the Tax Agency professionally and in a personalized way. You will save time and you will ensure that you comply with all the obligatory quarterly and annual procedures.
