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What is Trade Income Tax?

We offer you a brief explanation of the tax

The IAE is a tax that taxes the development, in Spanish territory, of economic activities. These economic activities may be or business, or professional or artistic and they may be carried out in a specific location or without any location.

The IAE is structured in a tariff that classifies economic activities , and in a Instruction that contains the rules for their application. The rates are made up of divisions, groupings, groups and headings and are divided into 3 sections. Section 1 classifies business activities; Section 2 classifies professional activities and Section 3 classifies artistic activities.

These are the activities carried out by a natural or legal person or other entities within an organization with a created infrastructure . They are covered in Section 1.

Business activities are the following:

  • Independent livestock.

  • Mining activities.

  • Industrial activities.

  • Commercial activities.

  • Service activities.

Concept of independent livestock farming: The following are considered as independent livestock farming activities: those whose purpose is the exploitation of a group of livestock which are included in one of the following cases:

  1. Grazing or foraging primarily on land that is not farmed or forested by the owner of the livestock.

  2. Livestock stabled outside rural properties, which are not considered as such if they are fed mainly with products obtained from the owner's agricultural or forestry holdings, even if the livestock installations are located outside the land.

  3. Transhumant livestock, which are not considered as such if they are fed primarily on pasture, silage, hay or feed obtained from land farmed by the owner of the livestock.

  4. A animal that is fed primarily on feed not produced on the farm where it is reared.

For the purposes of this tax, are not business activities and are therefore not subject to the tax:

  • Agricultural activities.

  • Dependent livestock farmers.

  • Forestry.

  • Fisheries.

These are the activities carried out by a natural person, on their own account and personally , in such a way that their personal qualities and ability are essential for their development. They are classified in section 2. 

These are the activities classified in Section 3 and may be carried out by a natural person or legal entity or entity.