Sunday, 7th June 2020

This Month's Magazine
A Spanish Limited Company?

A Spanish Limited Company?

Are you considering forming a limited company in Spain? Here is a brief outline of information that you might find useful.

There are two types of limited company available in Spain:

  • S.A. (Sociedad An√≥nima) - Public Limited Company
    With a minimum capital of 60,121 Euros authorised share capital and a minimum paid up share capital of 25%
  • S.L. (Sociedad Limitada) - Private Limited Company
    With a minimum paid up share capital of 3,006 Euros.

Tax rates
The full rate of company tax in Spain is 32.5%, to be reduced to 30% from 2008 onwards. Companies with a turnover below 3 million Euros can benefit from a reduced rate as follows: - 25% for profits up to 120,202 Euros, 30% for profits above this.


Calculation of taxable income
The Starting point is net profit per accounts, calculated in accordance with the Plan General de Contabilidad. The tax year is from January to December every year.

  • Depreciation must be within prescribed limits.
  • Goodwill amortisation is allowable. 
  • Movements in the following provisions are allowable for tax purposes:
    Doubtful debts, legal expenses, stock obsolescence, devaluation of securities, extraordinary repairs, unsold publications.
  • There is no distinction between long and short term gains. 
  • Tax losses can be carried forward for up to 10 years.

Capital Gains
Capital gains made by companies are taxable as part of profits.

Disallowable items 

  • Penalties and fines.
  • Corporation tax payments.
  • Gifts and donations other than to specifically approved organisations. 
  • Expenditure on improvement and enhancement of capital assets.
  • Depreciation over maximum prescribed rates (unless it can be proved that this was the actual depreciation).

Payment of Company Tax & Returns
All companies need to submit annual accounts to the Mercantile Registry (Registro Mercantil.
The company tax return must be filed within 6 months and 25 days after end of accounting period. Payment by instalments of company tax is in April, October and December. As a general rule, each instalment is 18% of the previous year's company tax liability.
A separate method of calculation applies to large companies whose turnover in the previous year exceeds a set limit.

This is just to give you a very brief insight into what a company may mean in Spain. You must always consult a professional accountant for more information.

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equity release

Are you still doing equity release?..Here in france they could do with it .... There is only one bank that does it and the deal is rubbish

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