2. Economic Activities Tax

Economic Activities Tax

The Tax on Economic Activities (IAE) is a direct tax of a real nature that taxes the exercise of business, professional or artistic activities in national territory, whether or not they are exercised in a specific location and whether or not they are specified in the tax rates.

Its management is shared between the General State Administration and the local Administrations or CC. AA. , depending on the type of fee (municipal, provincial or national) under which the corresponding activity pays taxes.

The Tax Agency's electronic headquarters includes a virtual assistance tool called " Activity Finder and its tax obligations ", where you can consult, among other issues, the classification of the economic activities carried out or to be carried out, in their corresponding groups or sections according to the Rates of the Tax on economic activities.

Census management (creation of tax registration, classification of activities and setting of quotas) is the exclusive responsibility of the State Tax Administration. However, the notification of these acts, as well as the notification of the settlements that determine the tax debts, can be carried out by both the City Councils and the State Administration.

The census management of national and provincial quotas is carried out by the AEAT .

The census management of municipal quotas may be delegated to the Autonomous Communities, City Councils, Provincial Councils, Island Councils or Councils and to other entities recognised by law that so request.

The following are subject to the IAE natural persons , legal persons and entities without legal personality that carry out business, professional and artistic activities within the national territory; except for agricultural, dependent livestock, forestry and fishing industries.

The following are exempt from the IAE , among others:

Natural persons, whether or not they are residents of Spanish territory.
Taxpayers of Corporate Tax, civil companies and entities of article 35.4 of Law 58/2003, of December 17, General Tax Law, that have a net turnover amount of less than (INCN) 1,000,000 euros. ⁽¹⁾
Taxpayers under the IRNR , who operate in Spain through a permanent establishment, and have a net turnover of less than 1,000,000 euros. ⁽²⁾
Taxpayers who begin to exercise their activity in Spanish territory, during the first two tax periods of this tax in which their activity is carried out.

For these purposes, it will not be considered that the exercise of an activity has begun when it has been previously carried out under another ownership, a circumstance that will be understood to occur, among other cases, in the cases of merger, spin-off or contribution of branches of activity.

Taxpayers exempt for all their economic activities, do not have to submit their own IAE declaration, but rather the presentation of the census declarations of registration, modification or cancellation (form 036) will be sufficient and sufficient.

Link to information and procedures for IAE

⁽¹⁾ ⁽²⁾ To determine the INCN the following rules will be taken into account: ^{(Back 1)} ^{(Back 2)}

1. The net amount of turnover shall be determined in accordance with the provisions of section 2 of article 35 of the Commercial Code.
2. The net amount of the turnover will be, in the case of taxpayers of the Corporate Tax or taxpayers of the Non-Resident Income Tax, that of the tax period whose deadline for filing returns for said taxes ended the year prior to the accrual of this tax. In the case of civil companies and entities referred to in article 35.4 of Law 58/2003, of December 17, General Tax Law, the net amount of the turnover will be that corresponding to the penultimate year prior to the accrual of this tax. If the tax period had a duration of less than a calendar year, the net amount of the turnover will be increased to one year.
3. To calculate the net amount of the taxpayer's turnover, all of the economic activities carried out by him or her shall be taken into account.

However, when the entity forms part of a group of companies due to any of the circumstances considered in section 1 of article 42 of the Commercial Code as determining the existence of control, regardless of the obligation of accounting consolidation, the net amount of the turnover will refer to the set of entities belonging to said group.

For the purposes of the provisions of the preceding paragraph, the cases of article 42 of the Commercial Code shall be understood to be those included in section 1 of Chapter I of the rules for the formulation of consolidated annual accounts, approved by Royal Decree 1159/2010, of September 17.
4. In the case of taxpayers for Non-Resident Income Tax, the net amount of the turnover attributable to all permanent establishments located in Spanish territory will be taken into account.

2.1 Models