How company rules and costs change by region and city

Terms used

• ITP — The ITP is the regional transfer tax on second-hand property purchases and some asset transfers.
• AJD — The AJD is a regional stamp duty on notarised deeds, such as mortgages and some corporate operations.
• IRPF — The IRPF is Spain's personal income tax, whose rates partly depend on the region.
• IAE — The IAE is a yearly municipal tax on carrying out a business activity.
• IBI — The IBI is the yearly municipal property tax paid by the owner.
• ICIO — The ICIO is a one-off municipal tax on building works and refurbishment that need a licence or notification.
• Plusvalía — The plusvalía is a municipal tax on the sale of urban land.
• Ordenanzas fiscales — The ordenanzas fiscales are each town hall's local tax rules, setting its rates and bonuses.

Key rules

• Corporate tax: Corporate tax is national, except in the Basque Country and Navarre, which have their own regimes.
• Regional taxes: Each region sets its own rates and reliefs for transfer, stamp duty, inheritance and similar taxes.
• Town hall: Your town hall sets local rates and bonuses, so read its ordenanzas fiscales before choosing premises.
• Deed language: You can always sign in Spanish; a co-official language is possible if the notary knows it.

What changes by place, and what does not

Company law and corporate tax are the same across most of Spain. Three things change with location: regional taxes, municipal taxes and charges, and the language of the company deed. The Basque Country and Navarre are the big exception, because they run their own tax regimes, including corporate tax. If you will be based there, use their own tax authorities for everything below.

Regional taxes

Each autonomous community sets its own rates, reliefs and bonuses within national limits. The ones most likely to touch you:

• ITP: charged on second-hand property purchases and some asset transfers. General rates run from about 6% to 11% depending on the region.
• AJD: charged on notarised deeds, such as mortgages, and some corporate operations. Rates vary by region. Setting up a company is generally exempt.
• Regional income tax scale (IRPF): brackets and rates differ between communities, which affects owners and employees.
• Inheritance, gift and wealth tax: bonuses differ a lot. Madrid and Andalucía, for example, have large reductions.
• Other regional taxes: gambling, tourist stays (Catalonia and the Balearics) and environmental matters, plus regional fees for administrative services.

To find the current rate, look at your community's tax agency or finance department website, and at the national tax agency.

Municipal taxes and charges

Your town hall sets its own rates and local bonuses. Expect these:

• IAE: a yearly tax on carrying out a business activity. You are exempt if you are an individual, if your company has turnover under EUR 1 million, or during the first two years of a new activity. Other companies pay a fixed tariff multiplied by local coefficients.
• IBI: yearly property tax paid by the owner, based on the property's cadastral value.
• ICIO: paid once on building works or refurbishment that need a licence or notification. The rate is set by each municipality, up to a legal maximum of 4% of the actual cost of the works.
• Plusvalía: paid on the sale of urban land.
• Local fees: the opening licence or declaración responsable, rubbish collection, signage, terrace occupation, and vehicle tax.

Each town hall publishes its rates in its ordenanzas fiscales (local tax ordinances). Search for them on the town hall's website, and ask the licences department if you cannot find them. The resource below lists where to look.

Deed language

You can always sign your company deed in Spanish. In Catalonia, the Balearics, Valencia, Galicia, the Basque Country and part of Navarre, you can also ask for the deed in the local co-official language, if the notary knows it. A bilingual version is possible.

The Mercantile Registry accepts documents in the co-official language in its own territory. The registrar can ask for a Spanish translation where needed.

If you do not understand the language of the deed, the notary must interpret or translate it for you. Foreign documents, such as a foreign power of attorney, generally need a sworn translation and, where required, an apostille. The documents list below sets out what to prepare.

How to find your local rule

1. Choose the region and town hall where the company and premises will be.
2. Check the regional tax agency for regional rates.
3. Check the town hall's tax ordinances and licence forms for local charges.
4. Ask your notary which languages they work in before booking the signing.

Documents you need

• Sworn translation into Spanish of any foreign-language document, such as a foreign power of attorney, made by a traductor jurado (an officially sworn translator)

• Apostille on foreign documents, such as a foreign power of attorney, where the document's country requires one, issued by the authority of the country where the document was made

• Spanish translation of a deed or document written in a co-official regional language, if the registrar asks for one

Where to find your council's business rules and forms

• Your town hall's website: Look in the online office (sede electrónica) or the sections called Urbanismo, Licencias, Actividades or Emprendedores. Find the ordinance on licences or activities (ordenanza de licencias or ordenanza de actividades) and the list of forms.

• Provincial or regional official gazette: Search the official gazette of your province (BOP) or region, where ordinances are published. Many councils also have their own page listing their ordinances.

• Regional business portal and the national single window for entrepreneurs: Read the step-by-step procedure on your region's business portal or through the entrepreneur service points (PAE) and the CIRCE system. Chambers of commerce can help too.

• Council licences department or citizen service office: Book an appointment (cita previa), phone or visit. Ask whether the zoning plan allows your activity at the address and whether you need an urban planning certificate. Small towns may only offer a basic form and email.

• Council online office with Cl@ve or a digital certificate: File procedures online and track your file. Without a Spanish certificate, you can use Cl@ve if you have an NIE, file in person at the council registry, or appoint a gestor, lawyer or architect as your representative. Companies must file online.

Frequently asked questions

Do the Basque Country and Navarre follow the same corporate tax as the rest of Spain?

No, the Basque Country and Navarre have their own tax regimes, while corporate tax is national everywhere else. If your company is based there, check the rules with the local provincial or regional tax office before you plan costs.

Am I exempt from the municipal business activities tax (IAE)?

Yes, you are exempt from the IAE if you are an individual, if your company has turnover under EUR 1 million, or if your activity is newly started and in its first two years. Other companies pay a fixed tariff multiplied by coefficients set by the municipality.

Can I sign my company deed in Catalan, Galician or another regional language?

Yes, in regions with a co-official language you can ask for the deed in that language, as long as the notary knows it. A deed in Spanish is always possible.

Do foreign documents need a translation for a company deed?

Yes, foreign documents such as a power of attorney generally need a sworn translation by a traductor jurado and, where applicable, an apostille.