Do I have to file an IAE tax return?

Taxpayers that must file the IAE return

• Entities that carry out one or more economic activities in Spanish territory and whose net revenues (INCN) are equal to or greater than €1,000,000. The form to be submitted is either form 840 or the one approved by the local authority in the case of municipal fees, the management of which is delegated to the local authority.

• Non-resident income taxpayers who operate in Spain through a permanent establishment and whose INCN are equal to or greater than €1,000,000. The form to be submitted is either form 840 or the one approved by the local authority in the case of municipal fees, the management of which is delegated to the local authority.

When calculating the taxpayers INCN, all the economic activities carried out by the taxpayer will be taken into account.

In the case of entities that form part of a group of companies because one of the circumstances considered as determining the existence of control is true for the entity, the INCN will refer to all the entities belonging to that group, irrespective of whether or not there is an obligation to consolidate accounts.

In the case of non-resident income taxpayers, the non-resident income tax attributable to all the permanent establishments located in Spanish territory will be taken into account.

The following are exempt and are not obligated to file the IAE tax return.

1. Thestate, the autonomous communities and the local entities, as well as the autonomous bodies of the state and the public entities of a similar nature in the autonomous communities and belonging to local entities.

2. The entities that start to carry out their activity in Spanish territory are exempt during the first two tax periods .To this effect, an activity will not be considered to have just started when it was previously being carried out under a different ownership.This occurs, among other circumstances, in cases of mergers, divisions and contributions of branches of activity.

   Entities that start to carry out their activity and are eligible for this exemption but also carry out other activities for which they have to file the IAE tax return must file this return.

3. Individuals, whether or not they are resident in Spanish territory.

4. Entities that carry out one or more activities in Spanish territory and have an INCN of less than €1,000,000.

5. Taxpayers liable for non-resident income tax who operate in Spain through a permanent establishment and have net revenues of less than €1,000,000.

6. Entities managing the Social Security and the mutual benefit societies regulated in Law 30/1995, of 8 November, on the regulation and supervision of private insurance.

7. Public research bodies, educational establishments at all levels financed entirely with state, autonomous community and local entity funds, and foundations declared to be charitable or of public utility, and the educational establishments at all levels which, having a non-profit purpose, are under an educational arrangement system.An application is required to be submitted by the interested party and is granted when appropriate.

8. Non-profit associations and foundations for people with physical, mental and sensory disabilities, for activities of a pedagogical, scientific, welfare and employment nature that they carry out for the teaching, education, rehabilitation and guardianship of people with disabilities.An application is required to be submitted by the interested party and is granted when appropriate.

9. The Spanish Red Cross.

10. Taxpayers to whom the exemption from IAE applies by virtue of international treaties or conventions.