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TAX IN SPAIN
Social Security Tax:
 Technically social security is not a tax however Social
security tax is paid by workers and employees by their wages earned. These
taxes support the benefits under the social security system. Social security
covers all Spanish nationals as long as they work. There are 2 ways of paying
social security taxes. One of them is through the general scheme (also known as
the scheme for the dependant worker) the second scheme is called the scheme for
the self employed. The general scheme is a scheme for those people who are
employed by somebody. They along with there employer make joint payment of tax.
The scheme for the self employed is set up a little differently. You as the
employer are given a minimum and a maximum percentage of social security tax
and you can chose how much you want to pay however this provides no employment
benefits. The social security tax is a good thing to have because it means that
as a Spanish resident you can claim on things such as benefits for health care,
pensions, death benefits, unemployment and injuries at work. Should you find
that you work for under ?421 months then you are not regarded to earn enough to
pay social security taxes.
Corporation Tax:
Corporate tax (impuestos de sociedades) is a tax that is paid by companies
once a year (usually the calendar year), it is calculated by the profits that
the company produces. If your company is resident in Spain then you have
different type of taxation than if your company is a non resident corporation.
You can tell if your company is a resident company in Spain by the following
factors:
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If the company is management and head office are in Spain.
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If the companies registered office is in Spain.
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If your company was incorporated under Spanish law.
The average tax rate to registered Spanish companies is about 35% of there net
income. Companies that are not resident in Spain are liable for paying 25% on
withholding tax on income obtained in Spain. You have to pay your company tax
in instalments between the 1st and the 20th of the months of April, October and
December.
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