Xero is, arguably, one of the best accounting software for small and medium size business. We are Xero Certified advisors and expert users and, what is more important, have a long-dated expertise customizing Xero for its use in Spain.

The Xero global version and its use in Spain

Spanish accounting legislation does not prevent the use of any accounting software. Any company can use the system that best suits its needs, including Xero and other similar tools, like Zoho books, Odoo etc. The accounting categories established in the Spanish General Chart of Accounts are not compulsory (codes, names…). The use of English in the accounts is also perfectly valid. Of course, there are a few important exceptions to this: the accounting entries must be in Euro and the official year end accounts, which must be filed in the Registrar of Companies, must follow a preset layout. Thus, the official Balance Sheet and Profit and Loss account must be prepared according to the official guidelines which are very different to the reports generated by Xero. In practice, without a proper customization (in short, using the Spanish Chart of accounts) drafting the official year end accounts – and the Corporation Tax- can be a daunting task.

More importantly, the global version of Xero does not produce the kind of reports (not to talk about the files) needed for tax reporting. Without a proper design of the tax rates, the use of the Spanish CoA and several third-party tools, tax reporting would be very complex, exposing the business to potentially costly mistakes. Unfortunately, we have seen again and again companies trying to use Xero without a proper setup, leading to a very inaccurate tax reporting. Large fines are the sad outcome since in Spain under reporting can lead to huge fines, up to 100 % of the tax unpaid.

Xero initial setup

At Tax Partners we will ensure that the accounting of the company is fully compliant with Spanish General Admitted Accounting Principles, for instance that the accounts are correctly coded, withholding taxes treatment…

We will, among other tasks take care of the following:

• Correct coding of the accounts according to the Spanish CoA
• Definition of the correct tax rates for VAT reporting
• Creating the correct setup for Withholding Tax reporting
• Creating pay run items
• Supervision of depreciation of fixed assets according to Spanish rules

We will produce and file the following compulsory books and records required by the Spanish accounting and tax regulations. We will adapt the Xero reports to make them consistent with Spanish legal requirements, when required

• Journal
• General Ledger.
• Monthly Trial balances
• Profit and Loss Account
• Balance Sheet
•  
  Annual Report
• Payables Register
• Receivables Register
• Fixed assets records

Ongoing tax support for Xero clients

Our main task is to do the tax reporting based on the Xero records. In this respect we will file any tax report like VAT, Payroll Tax and Corporation Tax as required by the Law. We can even assume more complex tax compliance issues, like sending the invoices to the tax office servers for those clients filing the SII.

Besides this core activity, many clients prefer to entrust our firm with the whole day to day accounting tasks which will include the management of receivables and payables, bank reconciliation, running depreciation, payroll accounting etc.