Spanish Tax Compliance for Businesses and Professionals

Census Declaration: Understanding Your Tax Obligations

It is a purely informational statement – a non-tax settlement – that allows the Administration to understand the taxpayer's tax obligations, generate a list of applicable taxes, and control and manage the payment of taxes related to the activity in question.

Purpose of the Census Declaration

• Request a Tax Identification Number (TIN) (for companies only).
• Communicate applicable VAT rules.
• Renounce the objective assessment method and the simplified direct estimation method for Personal Income Tax (IRPF).
• Request inclusion in the Intra-Community Operators Register.
• Opt for the application of special pro-rata tax regimes.
• Communicate changes in identifying data, tax deregistration, or the commencement/cessation of a business or professional activity.

Who is Required to File a Census Declaration?

• All individuals and entities commencing a business or professional activity in Spain, and those receiving income subject to withholding.
• Individuals without legal personality acting as entrepreneurs and professionals who make intra-Community acquisitions of goods subject to VAT.
• Non-resident individuals or entities operating in Spain through a permanent establishment, and those receiving income subject to withholding.

Required Documentation for Census Declaration

Official Model 036 or 037 (simplified model), Tax Identification Number (for companies), and registration with the IAE.

Deadline for Filing

Before the commencement of the activity.

Where to File

Delegation of the Tax Administration or the State Agency for Tax Administration corresponding to the company's tax domicile.

Registration with the Business Tax (IAE)

The IAE (Impuesto sobre Actividades Económicas) is a local tax levied annually on business, professional, or artistic activities, regardless of where they are carried out.

IAE Exemptions: Who Qualifies?

As of January 1, 2003, all individuals and trading companies with a net turnover of less than €1 million are exempt from paying this tax (Royal Decree 1041/2003).

Required Documentation for IAE Registration

Official Model 845 or 846, depending on whether the fee is municipal or provincial, along with identification (ID).

IAE Registration Deadline

One month before the commencement of the activity, filing a separate statement for each activity to be exercised (Royal Decree 1041/2003, valid until January 1, 2008).

Where to Register for IAE

Administration office or the Inland Revenue for the location where the activity takes place.

Understanding the Business Tax (IAE)

Nature of the IAE Tax

The IAE is a direct tax with a real character.

Taxable Activities

An activity is considered business, professional, or artistic when its planning involves the organization of one's own means of production and human resources, or both, with the aim of intervening in the production or distribution of goods and services.

Operations Not Subject to IAE

• Disposal of company fixed assets, provided they have been inventoried as such for a minimum of 2 years before the transmission.
• Sale of goods for private use that have been used for at least 2 years.
• Sale of products received as payment for personal or professional services.
• The performance of a single, isolated act or retail operation.
• Purely decorative items for the establishment's exhibition.