Spanish tax year in Spain generally goes from January to December every yera.
Tax year in Spain is divided in 4 natural quarters. Everyone business registered is normally obliged to present different tax declarations depending their business activing, and their source of earnings in the end of every period. First quarter ends 31.03, Second quarter ends 30.06.XX, third quarter ends 31.10.XX, and forth quarter ends 31.12.XX along the year. Tax declarations must get submitted by the 20th of the following month from the end of every quarter. So that, 20.04.XX, 20.07.XX, 20.10.XX and 20.01.XX+1 (following year).
Every time that a business gets registered, should the business owner inform both the Inland Revenue and the Spanish Labour Services prior to consider self-employed activity fully registered in time.
At the time the Inland Revenue gets informed, should the business owner tick on every box that he/she will be considered obliged to submit information to the tax office, or pay tax in this concept.
It is important to say that Spanish tax office will look at one particular action done during the year as a business eventhoug the person who runs it does not. Very often happening, people rent their house out temporarely during the year, or participate in once-in-the-year transaction (i.e. commission) that makes him/her think not to consider necessarely to inform the tax office until the year ends, and it usually causes problems due not to understand the concept of “business” as the same way as the Inland Revenue does. In order to avoid any fines, it is very important that the business owner gets familiar with the tax forms, and the time in the year that he/she gets obliged to submit information or pay tax.
These are generally the most common tax declarations that a business owner will be liable to submit every quarter:
TAX FORM 111
It gets paid every quarter, and it means every tax taken at source by the business owner, and paid on behalf of a third party; generally employees, and proffessional services rendered (architects, Chart. Accountants, Solicitors, …).
Upon the event that no invoices meant any tax retentions at source during the quarter, this tax form will be submitted anyway in order to avoid any fines.
Annual informative tax declaration associated to this tax declaration is TAX FORM 190, and it gets presented together with the forth quarter declarations in January to the following year. It lists particularly and individually each one during the year, and its corresponding yearly amount which was taxed at source.
TAX FORM 303 (VAT)
It gets paid to the VAT department every quarter. Depending the actual business regime (i.e. Modules, PAYE, Ltd. Corporations, ..), the tax form is numbered differently, but generally speaking it is worked out very evenly in every case.
It separated VAT associated to total earnings in the quarter, and VAT associated to total expenses. In case the difference is possitive, should the VAT difference get paid, and in case the difference is negative, should the VAT credit either claimed back in the end of the year, or roll it over to following years VAT quaterly returns.
These VAT tax forms also include products/expenses adcquired overseas and within the EU area which the business owner did not get VAT charged at the purchasing moment in time.
Annual informative tax declaration associated to this tax declaration is TAX FORM 390, and it gets presented together with the forth quarter declarations in January to the following year. It lists total VAT amounts both associated to yearly earnings, and to yearly expenses, as well as all rest of business expenses VAT exempted during the year (i.e. social security payments, payrolls, public liability insurance costs, …).
TAX FORM 115
It gets paid every quarter, and it means tax taken at source by the business owner on behalf of the unit owner if business is run from rented premises not belonging to the business owner but to a different party.
This tax form can not get submitted nul since the business owner is always obliged to pay the tax supposed to be taken at source from the rental payments made to the owner. However, and under special circumstances, it might be submitted nul in one or few particular quarters in the year (i.e. free-of-rent periods given by the owner to the business from starting period for refurbishment, …).
Annual informative tax declaration associated to this tax declaration is TAX FORM 180, and it gets presented together with the forth quarter declarations in January to the following year. It lists particularly and individually each unit owner total invoice received during the year, and its corresponding yearly amount being taxed at source.
TAX FORM 130 / 131 (INCOME TAX)
It gets paid every quarter, and it corresponds to net earnings in the quarter.
It accumulates net earnings as the year goes along. So that, second quarter accumulates first, and second quarter earnings, third quarter accumulates first, second, and third quarter net earnings, and forth quarter does the same.
Tax paid every quarter is calculated to a 20% of the net earnings.
Upon the event that business owner regularly raising invoices of earnings were tax at source, and he/she did not get the full amount from the invoice paid, tax paid at source will be considered as a part-payment to this 20% quarter tax on net earnings.
Business owner (proffessionals, and agricultural & forrests care business owners) will no longer have the obligation to submit this tax form in the year 2 from business start year upon the event that more than 70% of the earnings were taxed at source in the previous year. So that, one and only income tax obligations during the year will be the tax retained at source by the payer.
Annual informative tax declaration associated to this tax declaration is TAX FORM 100, and it gets presented in the following year within the 01.05 and the 30.06 to the following year. This annual self-assessment is particularly special compared to the quarterly tax declarations (tax forms 130 / 131) because it incorporates the personal and familly allowance before the tax % is calculated over the total taxable earnings (net earnings minus allowance).
Income tax system all over the EU area is worked at under the main principle to the more you earn, the more you pay. However, personal and family circumstances are always taken alson into consideration. In summary, a single person with 30.000 euros earnings in the year, and living on his own pays a much higher percentage of tax than a married family couple with three children, one of them 50% disable, but with the same level of 30.000 euros earnings. In the principles, family and personal allowance is what makes the difference in between tax payers once the year is finished.