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FAQ
- Labour regulations in Spain
- Working days/Holidays
- How does the work relationship terminate?
- Can foreign staff work in Spain?
- How do I hire employees in Spain?
- How much does it cost to hire employees in Spain?
- How does Spanish taxation work?
- How does Spanish Corporate Income Tax work?
- What is a tax resident?
- With an SL, when do I get a refund of the VAT tax I've paid?
- What is censo VIES?
- What is Intrastat?
- What do I need to do to create a company in Spain?
- Branch vs. subsidiary, what are the main differences?
- What is the process of Bookkeeping services?
- How do we benefit from outsourcing our bookkeeping requirements to ROSCLAR?
Labour regulations in Spain
The basic labour regulation is the Workers Statute (Estatuto de los Trabajadores).
In addition, other sources of the labour regulations are Collective Agreements that may be agreed at a company or industry level, for the whole the state or more reduced territory.
Individual employment contracts also condition the labour relationship.
Working days/Holidays
The standard working week is 40 hours, around 1.800 hours a year. Collective Agreemets may reduce the amount of working hours.
Employees are entitled to take at least 30 calendar days (depending on the collective agreement applicable) of paid annual holidays for a year period, which cannot be substituted with economic compensation.
Additionally, there are 10 National publics holidays, 2 Regional public holidays and 2 local public holidays. Sometimes, public holidays fall on Saturday.
How does the work relationship terminate?
An employment contract may be terminated for certain reasons which normally do not give rise to a dispute, such as mutual agreement, expiration of the contract term, death or retirement of the employee or of the employer, and so on. In addition, the law regulates three principal grounds for dismissal of an employee:
Can foreign staff work in Spain?
In order to work in Spain (employer or self employed), non EU nationals have to obtain a work permit.
Whether they are EU or non EU nationals they will have to apply for an NIE (Tax Identification Number for foreigners).
How do I hire employees in Spain?
How much does it cost to hire employees in Spain?
The contribution to Social Security is capped on a monthly / daily basis.
These are the bases and rates for 2009:
F.T.C. = fixed term contract
In addition, IT (Temporal Incapacity) & IMS (Disability, Death and Survival) rates, based on the CNAE code (Economic Activity code) of the employer or the Occupation code of the employee
How does Spanish taxation work?
All residents (both individuals and corporate bodies) must pay taxes on all of their worldwide income.
Non-residents are subject to taxation only on incomes earned or paid in Spanish territory.
The main direct taxes applicable in Spain are:
How does Spanish Corporate Income Tax work?
Resident legal entities must pay tax taking into account all of their worldwide income.
Non-residents are subject to taxation for this tax solely for the income accrued or paid in Spanish territory.
In general accounting principles coincide with corporate tax principles, very little non-accounting adjustments must be made.
There are two rates: general 30% and 25% for small size companies.
Profit Before Taxes = Incomes - Expenses
Profit Before Taxes x 30% / 25% = Tax to be paid
What is a tax resident?
Individuals shall be deemed to have their principal residence in Spain if they meet any of the following conditions: They spend more than 183 days per calendar year in Spain or or when the core of their economic interests lies in Spain.
Corporate Body shall be deemed to be a resident of Spain if it meets any of the following conditions: It was incorporated in accordance with Spanish law, its registered office is in Spain, its effective headquarters are in Spain. A Corporate Body shall be deemed to have its effective headquarters in Spain if management and overall control of its activities are based in Spain.
With an SL, when do I get a refund of the VAT tax I've paid?
Your accountant will file VAT forms quarterly. If the VAT tax you've paid is less than the VAT tax you've received, you will be charged immediately for this difference. If it is more, this refund carries over to the next quarter. At the year end, the final balance is made, and if the VAT tax you've paid is still more than the VAT tax received, then you should ask to the Tax Agency for the difference, although it takes a long while to received.
What is censo VIES?
This is the term for the EU VAT registry. Companies listed in this registry don't have to include VAT tax when invoicing companies from another country that are listed in the registry. To find out if a company is listed in this registry, go to the EU database. If you would like to obtain VAT registration for your company in Spain, please contact us.
What is Intrastat?
Intrastat is the system for collecting information on the trade of goods (not services) between EU countries. Every business trading goods with other EU countries must declare certain information to Intrastat. Please contact us about our service to file the monthly Intrastat reports in Spain.
What do I need to do to create a company in Spain?
The creation of a new company in Spain takes a while (from 8-12 weeks). We can also offer the possibility of buying and already existing, which will allow you to be ready in just three weeks. Contact us for more information.
Branch vs. subsidiary, what are the main differences?
Summarized below are the main differences between the two types of entity that should be taken into consideration.
From a Spanish legal standpoint, the main differences between a branch and a subsidiary are as follows:
From a tax standpoint, as stated earlier, both the branch and the subsidiary are, in general terms, taxed under Spanish corporate income tax at 30% on their net income, but there are some other aspects that should be mentioned, amongst others:
What is the process of Bookkeeping services?
The client first sends us the documents to our secured server. They are analyzed and the work is allocated to our preparers. These documents are organized and fed into the system by the preparers. If any correction is required at this stage, they are forwarded to the client with review notes. The work is then done and evaluated by the Project Manger and the perfect work is then returned to the client.
How do we benefit from outsourcing our bookkeeping requirements to ROSCLAR?
Outsourcing with ROSCLAR, offers the advantage of a single-source support that provides a wide variety of Bookkeeping - Accounting Services, other advantages for you include:
The basic labour regulation is the Workers Statute (Estatuto de los Trabajadores).
In addition, other sources of the labour regulations are Collective Agreements that may be agreed at a company or industry level, for the whole the state or more reduced territory.
Individual employment contracts also condition the labour relationship.
• • • • • • • • • •
Working days/Holidays
The standard working week is 40 hours, around 1.800 hours a year. Collective Agreemets may reduce the amount of working hours.
Employees are entitled to take at least 30 calendar days (depending on the collective agreement applicable) of paid annual holidays for a year period, which cannot be substituted with economic compensation.
Additionally, there are 10 National publics holidays, 2 Regional public holidays and 2 local public holidays. Sometimes, public holidays fall on Saturday.
• • • • • • • • • •
How does the work relationship terminate?
An employment contract may be terminated for certain reasons which normally do not give rise to a dispute, such as mutual agreement, expiration of the contract term, death or retirement of the employee or of the employer, and so on. In addition, the law regulates three principal grounds for dismissal of an employee:
- Collective layoff. Economic, technical, organization or production causes when, in a 90 day period, these affects to :
- Entire payroll, if the business ceases and there are at least 5 employees
- 10 employees in companies of less than 100
- 10% of the employees in companies from 100 to 300 employees
- 30 employees in companies with more than 300 employees
- Objective causes:
- Ineptitude known after being hired or supervened
- Inability of the worker to adapt to changes
- Objectively evidenced need to cancel posts of work due to economic, technical, organization or production reasons.
- Disciplinary action: repeated and unjustified absenteeism; disobedience; physical or verbal abuse towards the employer; breach of contractual good faith or abuse of trust; willful diminution in the ordinary job productivity; habitual drug or alcohol abuse which adversely affects job performance.
Dismissal classification: - Justified: conforming to law
- Disciplinary: no severance
- Objective: 20 days / year up to 12 months of salary.
- Unjustified: no legal cause for the dismissal or incorrect procedure
- Reinstate the worker
- Termination by paying 45 days / year , up to 42 months of salary
- Null: Its cause is a form of discrimination. It implies a violation of fundamental rights. It affects pregnant workers during the period of suspension of the contract due to maternity, risk during pregnancy, adoption or fostering, reduction of working hours to care for children or handicapped persons or reduction for breastfeeding, and in certain circumstances female workers who have been the victims of gender violence. Failure to comply with the formalities for objective dismissals (unless no advance notice is served).
- Immediate reinstatement of the worker.
- Payment of the unpaid salaries.
• • • • • • • • • •
Can foreign staff work in Spain?
In order to work in Spain (employer or self employed), non EU nationals have to obtain a work permit.
Whether they are EU or non EU nationals they will have to apply for an NIE (Tax Identification Number for foreigners).
• • • • • • • • • •
How do I hire employees in Spain?
- By creating a Spanish company. Once the company is registered with Social Security, you can set up the payroll for the employees.
- If you have a well-established business outside Spain, but you do not plan on having a physical office in Spain, then you should consider our service to register your foreign business with the Social Security office. Namely: We will obtain the Spanish employer number. In order to set up this non permanent establishment, you will have to appoint a legal representative of your company in Spain.
• • • • • • • • • •
How much does it cost to hire employees in Spain?
The contribution to Social Security is capped on a monthly / daily basis.
These are the bases and rates for 2009:
CONTRIBUTION BASES |
|
|||
Contribution Group |
Occupational Classifications |
Minimum bases |
Maximum bases |
|
1 |
Engineers and University Graduates.Senior management personnel not included in article 1.3.c) of the Statute of Workers Rights |
1,016.40 euros/month |
3,166.20 euros/month |
|
2 |
Engineering Technicians, Experts and Assistants with a University Degree |
843.30 euros/month |
3,166.20 euros/month |
|
3 |
Administrative and workshop managers |
733.50 euros/month |
3,166.20 euros/month |
|
4 |
Assistants without a University Degree |
728.20 euros/month |
3,166.20 euros/month |
|
5 |
Administrative Officials |
728.20 euros/month |
3,166.20 euros/month |
|
6 |
Subordinates |
728.20 euros/month |
3,166.20 euros/month |
|
7 |
Administrative Assistants |
728.20 euros/month |
3,166.20 euros/month |
|
8 |
First and second degree skilled workers |
24.27 euros/day |
105.54 |
|
9 |
Third degree skilled workers and Specialists |
24.27 euros/day |
105.54 |
|
10 |
Unskilled labourers |
24.27 euros/day |
105.54 |
|
11 |
Workers under 18 years of age |
24.27 euros/day |
105.54 |
|
CONTRIBUTION RATES (%) |
|
|||
CONTINGENCIES |
COMPANY |
WORKERS |
TOTAL |
|
Common C. |
23,60 |
4,70 |
28,30 |
|
Overtime Force Majeure |
12,00 |
2,00 |
14,00 |
|
Other Overtime |
23,60 |
4,70 |
28,30 |
|
UNEMPLOYMENT |
COMPANY |
WORKERS |
TOTAL |
General Rate |
5,55 |
1,55 |
7,30 |
F.T.C. Full Time |
6,70 |
1,60 |
8,30 |
| F.T.C. Part time. | 7,70 |
1,60 |
9,30 |
F.T.C. = fixed term contract
COMPANY |
WORKERS |
TOTAL |
|
WAGE GUARANTEE FUND (FOGASA) |
0,20 |
|
0,20 |
OCCUPATIONAL TRAINING |
0,60 |
0,10 |
0,70 |
In addition, IT (Temporal Incapacity) & IMS (Disability, Death and Survival) rates, based on the CNAE code (Economic Activity code) of the employer or the Occupation code of the employee
• • • • • • • • • •
How does Spanish taxation work?
All residents (both individuals and corporate bodies) must pay taxes on all of their worldwide income.
Non-residents are subject to taxation only on incomes earned or paid in Spanish territory.
The main direct taxes applicable in Spain are:
- Corporate income tax
- Personal income tax
- Non-resident income tax
• • • • • • • • • •
How does Spanish Corporate Income Tax work?
Resident legal entities must pay tax taking into account all of their worldwide income.
Non-residents are subject to taxation for this tax solely for the income accrued or paid in Spanish territory.
In general accounting principles coincide with corporate tax principles, very little non-accounting adjustments must be made.
There are two rates: general 30% and 25% for small size companies.
Profit Before Taxes = Incomes - Expenses
Profit Before Taxes x 30% / 25% = Tax to be paid
• • • • • • • • • •
What is a tax resident?
Individuals shall be deemed to have their principal residence in Spain if they meet any of the following conditions: They spend more than 183 days per calendar year in Spain or or when the core of their economic interests lies in Spain.
Corporate Body shall be deemed to be a resident of Spain if it meets any of the following conditions: It was incorporated in accordance with Spanish law, its registered office is in Spain, its effective headquarters are in Spain. A Corporate Body shall be deemed to have its effective headquarters in Spain if management and overall control of its activities are based in Spain.
• • • • • • • • • •
With an SL, when do I get a refund of the VAT tax I've paid?
Your accountant will file VAT forms quarterly. If the VAT tax you've paid is less than the VAT tax you've received, you will be charged immediately for this difference. If it is more, this refund carries over to the next quarter. At the year end, the final balance is made, and if the VAT tax you've paid is still more than the VAT tax received, then you should ask to the Tax Agency for the difference, although it takes a long while to received.
• • • • • • • • • •
What is censo VIES?
This is the term for the EU VAT registry. Companies listed in this registry don't have to include VAT tax when invoicing companies from another country that are listed in the registry. To find out if a company is listed in this registry, go to the EU database. If you would like to obtain VAT registration for your company in Spain, please contact us.
• • • • • • • • • •
What is Intrastat?
Intrastat is the system for collecting information on the trade of goods (not services) between EU countries. Every business trading goods with other EU countries must declare certain information to Intrastat. Please contact us about our service to file the monthly Intrastat reports in Spain.
• • • • • • • • • •
What do I need to do to create a company in Spain?
The creation of a new company in Spain takes a while (from 8-12 weeks). We can also offer the possibility of buying and already existing, which will allow you to be ready in just three weeks. Contact us for more information.
• • • • • • • • • •
Branch vs. subsidiary, what are the main differences?
Summarized below are the main differences between the two types of entity that should be taken into consideration.
From a Spanish legal standpoint, the main differences between a branch and a subsidiary are as follows:
- Minimum capital: an S.A. must have a minimum capital of €60,102, whereas a S.L.’s must have a minimum capital of €3,006.’s. A branch does not require a minimum assigned capital.
- A subsidiary is a separate legal entity, whereas a branch is not a legal entity and has the same legal identity as its parent company.
- The liability of the shareholders of a subsidiary incorporated as an S.A. (or S.L.) for the debts of the subsidiary is limited to the amount of the capital contributions they make or intend to make. In the case of a branch, there is no limit to the parent company’s liability.
From a tax standpoint, as stated earlier, both the branch and the subsidiary are, in general terms, taxed under Spanish corporate income tax at 30% on their net income, but there are some other aspects that should be mentioned, amongst others:
- Remittance of profits: The remittance of branch profits and the distribution of a subsidiary’s dividend to a non-EU parent company resident in a non-treaty country are taxable in Spain at the rate of 18%; if the parent company is an EU-resident, the remittance or distribution is normally tax-exempt.
- If the parent company is resident in a non- EU country with which Spain has a tax treaty, the dividends would be taxable at the reduced treaty rate and the remittance of branch profits would, under most of the treaties, not be taxable in Spain.
- Share in parent company overheads: In practice, it is normally easier for these expenses (if any are imputed) to qualify as deductible in the case of a branch as in the case of a subsidiary.
- Interest on loans from a foreign parent company to its Spanish branch is not tax-deductible for the branch. By contrast, the interest on loans from the shareholders of a subsidiary is normally tax-deductible for the subsidiary, provided that the transaction is valued on an arm’s-length basis.
• • • • • • • • • •
What is the process of Bookkeeping services?
The client first sends us the documents to our secured server. They are analyzed and the work is allocated to our preparers. These documents are organized and fed into the system by the preparers. If any correction is required at this stage, they are forwarded to the client with review notes. The work is then done and evaluated by the Project Manger and the perfect work is then returned to the client.
• • • • • • • • • •
How do we benefit from outsourcing our bookkeeping requirements to ROSCLAR?
Outsourcing with ROSCLAR, offers the advantage of a single-source support that provides a wide variety of Bookkeeping - Accounting Services, other advantages for you include:
- Competitive Pricing
- Outstanding quality
- High data security
- Most efficient and effective solutions
- High processing capacity
- Flexibility to outsource some or all of your bookkeeping and accounting tasks
- Highly skilled professionals with charted accounting certifications
- Fulfilment of all your obligations in Spain.
• • • • • • • • • •
