subject: Taxation, Accounting, and Labor Law in Spain [print this page] Taxation, Accounting, and Labor Law in Spain
If you live in Spain, then you are subject to taxes. If you intend to move to Spain, then this article will provide you with the necessary information about taxation and labor law in this country. To begin with, Spanish law requires that all residents, whether they be individuals or corporate bodies should pay their taxes. These taxes are applicable on all their worldwide income. Taxation also applies to non-residents, who are subject only on incomes that they earn or pay on Spanish territory.
According to Spanish law, there are three levels of payments. These are classified as taxes, levies, and contributions. Further, direct taxes applicable in Spain are classified as corporate income tax, personal income tax, as well as non-resident income tax. Similarly individuals and corporate also pay indirect taxes if applicable, which include Value Added Tax (VAT), transfer, and stamp tax. Some of the other important taxes in the country include Company Tax, Capital Gains Tax, Gift Tax, Offshore Company Tax, Social Security, amongst others.
For those who want to settle in Spain permanently, it is advisable to take the advice of a professional tax-consulting agency. Present tax collections are stiff and penalties are heavy. Therefore, it is advisable to pay taxes to the government in Spain regularly and without fail. For those who cannot understand the Spanish taxation system, the simplest way to understand this is that three tiers of government levy taxes. These tiers are the central government, the autonomous regional governments, and the local municipalities. Because of the complicated taxation system in Spain, various tax-consulting firms have come-up in the country. These firms offer its clients with specialist advice on various taxation matters.
About labor law in Spain the country has a modern constitution as well as a highly regulated labor market. The Statute of workers gives basis to all employment relationships in Spain. Individuals can begin working at the age of 18, at which they can enter into a binding contract with an employer. For individuals from the European Union (EU), a work permit is not required, though a residence card is required. This residence card has a validity of five years. For non-EU nationals, a work permit along with a residence card is mandatory. Work permits are normally issued for a period of 12 months, but it can be issued for a period of 5 years as well. These work permits can include restrictions regarding the employer or the industry the individual is in.
In addition, there are various laws concerning health and safety, social security, and other laws. Numerous consulting firms have also been established to give appropriate advice in the fields of recruitment, remuneration, transfers, as well as dismissals and guide companies within the ambit of various labor laws in Spain.
Accounting laws in Spain are so legislated that companies based in Spain are required to follow the Spanish rules of accounting. According to accounting regulations, companies require to present their annual accounts at the provincial registry within six months after the year closes. The General Accounting changes took place in Spain in the year 2008 with the intention of better fraud control and making the accounting system uniform with other accounting systems in the EU. The publication of the new General Accounting Plan has also affected the accounting scenario in Spain as more and more countries are now adapting the IFRS (International Finance Reporting Standards). Financial accounting firms thoroughly understand the accounting scenario in Spain and can lend thorough and proper advice.
