Who is obliged to withhold Corporation Tax?

Article 41 of Law 27/2014, of 27 November, on Corporate Income Tax (LIS), merely states that withholdings on account shall be deductible from the gross tax payable.

Pursuant to Article 128 of the Spanish Corporation Tax Act, entities, including communities of property and owners' associations, that pay or pay income subject to corporation tax are obliged to withhold or make payments on account, by way of payment on account, the amount resulting from applying the withholding percentages indicated below to the withholding base, and to pay the amount into the Treasury in the cases and in the forms established.

Individuals are also obliged to withhold and pay tax on income paid or paid in the exercise of their economic activities, as well as individuals, legal entities and other entities not resident in Spanish territory that operate in Spain through a permanent establishment.

Likewise, insurance companies domiciled in another Member State of the European Economic Area that operate in Spain under the freedom to provide services will be obliged to make withholding or payment on account in relation to transactions carried out in Spain.

The person obliged to withhold shall submit a declaration of the amounts withheld or a negative declaration when no such declaration has been made, within the periods, in the form and in the places established.It shall also submit an annual withholding tax summary.The relevant model declarations shall be approved by the Minister of Finance.