The main features of companies taxation in Spain for 2012 are the following:
- Effective 2012 a Spanish company will be subject to a corporation tax rate of 30 %.
- However a reduced tax rate of 25 % may apply for small companies (turnover under EUR 10 Millions). The reduced tax rate is applicable to a bracket of 0 – 300.000 EUR of the taxable base.
- Domestic dividends are tax exempt providing the holding company owns a minimum of 5% of the issued share capital of the underlying subsidiary.
- Dividends from foreign Subs are tax exempt providing the company owns a minimum of 5% of the issued share capital of the underlying subsidiary and the latter is subject to a similar tax regime (minimum 22.5 % corporate tax) or established in a State who has signed a Tax Treaty with Spain.
- New assets acquired during 2012 can be freely depreciated for tax purposes
- Debt to equity ratio of 3:1 applies for interest paid to a related foreign company.
- Spain follows OCDE transfer pricing guidelines for transaction between related companies
- A 21% withholding tax will be imposed on distributions of dividends paid to foreign shareholders unless a Tax Treaty applies or under EU/parent/subsidiary directive. Likewise, outbound dividends paid by Spanish Holding Companies are not subject to withholding tax except for dividends to tax shelters .