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Taxation
is recognized as being higher in Spain than in the UK but the
authorities seem to be extremely trusting with the black economy
and appear to be content if every business pays a little tax.
However, this may change with the influence of the single European
market.
We
would advise that you retain the use of the Gestor who initially
applied for all the various licenses and legal requirements for
you, as to complete your quarterly IVA (VAT) & TAX returns.
The system is complex and changes all the time so it is best left
in the hands of a professional which will also leave you
free to devote more time to your business. The level of IVA (VAT)
in Spain is lower than in the UK but there is no threshold for
the level of turnover at which registration must take place, therefore
every business has to declare quarterly returns.
Income
tax is paid quarterly on account with a balancing payment/ re-payment
on an annual basis. We believe that this is a far better system
than in the UK where tax is paid in arrears and often at a time
when the cash flow of the business means that no funds are available.
There
is also a system, which can apply to most businesses, which allows
the business to pay one quarterly payment for IVA and TAX at a
rate set by the authorities regardless of turnover. This system
is very simple and you do not have to keep books or records. However
your Gestor will advise you which is the best system for your
kind of business.
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