- 1Spain: An attractive country for investment
- 2Setting up a business in Spain
- 3 Tax System
- 4 Investment aid and incentives in Spain
- 5 Labor and social security regulations
- 6 Intellectual property law
- 7Legal framework and tax implications of e-commerce in Spain
- AI Annex I Company and Commercial Law
- AIIAnnex II The Spanish financial system
- AIIIAnnex IIIAccounting and audit issues
- Central government taxes
- Corporate Income Tax
- Personal Income Tax
- Nonresident Income Tax
- Wealth Tax
- Inheritance and Gift Tax
- Spanish Value Added Tax
- Transfer and Stamp Tax
- Excise and Special Taxes
- Custom Duties on Imports
- Tax on Insurance Premiums
- Tax on Financial Transactions
- Tax on certain Digital Services
- Reporting obligations relating to Assets and Rights Abroad
- Special Regimes of certain Autonomous Communities
- Local taxes
- Exhibit I - Corporate income tax incentives for investment
- Exhibit II - Treaty tax rates
- Exhibit III - Practical examples
- Exhibit IV - Case of Application of the Regime for foreign-securities holding companies (ETVE)...
- Exhibit V - Nonresident case study: Income obtained without a permanent establishment
- Exhibit VI - VAT case study
3. Local taxes
3.2 Other taxes
3.2.1 Tax on erection and installation projects and construction work
This tax is levied on the actual cost of any work or construction activity that requires prior municipal permission, excluding VAT and any similar taxes.
The tax rate will be set by each municipal council up to a top rate of 4%, and the tax falls due at the start of the project regardless of whether the permit has been obtained.
3.2.2 Tax on increase in urban land value
This tax is levied on the increase disclosed in the value of urban land whenever land is transferred.
- Taxpayer: In transfers for consideration, the transferor, and in donations, the transferee.
- Tax rate: The rate set by each municipal council and capped at 30%.
- Tax base: The increase in the value of the land. The tax base is determined by reference to the value of the land when the tax falls due, which in the transfer of land will be the value that has been determined for the purposes of property tax. Certain annual percentages will be applied to this value based on the ownership period, which will be determined by each municipal council, and may not be higher than the following limits: (i) Between one and five years: 3.7; (ii) Up to 10 years: 3.5; (iii) Up to 15 years: 3.2; (iv) Up to 20 years: 3.
This tax is deductible for personal income tax purposes from the transfer value of real estate.