Taxes in Spain for Businesses: Rates, Key Features, and the Beckham Law Regime

When starting a business in Spain, one of the key factors determining its success is the tax system. Even though accounting principles may seem similar, Spain’s approach to taxation differs significantly from what entrepreneurs from Russia are used to. These differences go beyond tax rates and types — they touch on the very philosophy of tax control, the level of reporting detail, and the degree of business responsibility.

Spanish tax legislation is based on strict compliance and financial transparency. It is crucial to understand which types of income are subject to taxation, which expenses can be deducted, and when and how reports must be filed. Mistakes or delays can result in substantial fines, making competent tax planning not just advisable, but essential.

This article will be useful for entrepreneurs planning to open a company or branch in Spain, investors considering relocation and tax residency, as well as startup founders and digital nomads operating internationally. We will examine in detail how the Spanish tax system differs from the Russian one, what taxes and incentives exist for businesses, and how to legally optimize your tax burden when moving to Spain.

For many foreigners, Spain is attractive not only for its quality of life but also for the opportunity to take advantage of special tax regimes — such as the well-known Beckham Law, which allows for a significant reduction in taxes on income earned abroad. However, to benefit from this regime, it is essential to understand who qualifies for it and under what conditions.

In the following sections, we will analyze the key differences between the Spanish and Russian tax systems and explain how to build an effective tax strategy to make doing business in Spain not only compliant but also profitable.

How Spain’s Tax System Differs from Russia’s: 

A Practical Perspective for Businesses

Although both Spain and Russia require entrepreneurs to maintain accounting records and submit tax reports, the differences between their taxation systems are fundamental. Spain imposes far stricter requirements for transparency and the level of detail in financial reporting, and the control exercised by the Agencia Tributaria (Spanish Tax Agency) is considerably tighter than in Russia.

1. In Spain, tax reporting is based on the principle of maximum detail. Companies must not only record all financial transactions but also regularly submit numerous forms and declarations. For instance, businesses are required to file a specific declaration listing all clients who have paid more than €3,005 during the fiscal year. Such obligations enable the tax authorities to detect inconsistencies and monitor financial flows, making the system far more transparent — but also more complex to manage.

In contrast, Russia’s tax reporting is much simpler. The focus is mainly on key budgetary taxes such as profit tax, VAT, and social contributions. Reporting forms are standardized, and interaction with tax authorities is less intensive. This gives entrepreneurs more flexibility but also increases the risk of errors, especially when accounting is handled without professional assistance.

1. Another crucial distinction lies in how bookkeeping is managed. In Spain, it is practically impossible to handle accounting independently — all financial reporting must be prepared and filed by licensed professionals (gestores or asesores fiscales). These specialists not only manage the accounts but also bear professional liability, backed by mandatory insurance coverage.

In Russia, there are no such licensing requirements. An entrepreneur may hire any accountant or even manage the company’s finances personally. This approach reduces costs but increases risks, as calculation errors or delays in filing reports can lead to penalties and audits.

1. Spain’s tax authorities also make extensive use of digital monitoring systems, allowing the Agencia Tributaria to track corporate financial activity in real time. The VAT reporting platform SII (Suministro Inmediato de Información) automatically processes invoice data, ensuring immediate oversight. Russia’s system, while modernizing, has yet to achieve this level of automation and transparency.

In essence, Spain’s tax framework is characterized by its high degree of regulation and accountability. Running a business in Spain is efficient and secure only with professional support and strict compliance with reporting deadlines and procedures. While this increases administrative demands on entrepreneurs, it also provides a stable, predictable, and transparent tax environment — essential qualities for sustainable business growth.

The Three Pillars of Spain’s Tax System: 

Corporate Tax, VAT, and Social Contributions

Spain’s tax system is founded on the principles of comprehensive control and strict regulation. For businesses, this means the obligation to account for several key types of taxes and to submit regular declarations for each. The main taxes that companies and individual entrepreneurs encounter in Spain are corporate income tax, value-added tax (IVA), and social security contributions.

Corporate Income Tax (Impuesto sobre Sociedades)

Corporate income tax in Spain applies to all legal entities operating within the country. The standard rate is 25%, while newly established companies benefit from a reduced rate of 15% for the first two years in which they generate profit. This measure is one of the most popular tax incentives, helping startups and young companies ease their initial financial burden and reinvest in growth.

In Spain, the taxable base is calculated on the basis of accounting profit adjusted for tax differences. All expenses deducted from income must be properly documented and business-related. The Spanish Tax Agency (Agencia Tributaria) pays particular attention to the depreciation of assets, interest payments, and transactions between related companies. Mistakes in these areas can lead to additional assessments and substantial fines.

Corporate tax returns are filed annually, but companies must also make three advance payments per year. Declarations are submitted electronically, and any inconsistencies with other tax forms are automatically flagged for review by the authorities.

Value-Added Tax (IVA)

IVA — Impuesto sobre el Valor Añadido — is Spain’s equivalent of value-added tax (VAT), charged on the sale of goods and services. The standard rate is 21%, while reduced rates of 10% and 4% apply to specific categories of goods and services.

The 10% rate covers items such as food products, medical supplies, hospitality services, and some cultural activities. The 4% rate applies to essential goods — including books, medicines, and basic foodstuffs.

Unlike in Russia, where many small businesses and self-employed professionals can operate under simplified regimes without VAT, in Spain exemptions from IVA are rare. Even small companies are generally required to register as VAT payers and to file quarterly declarations listing all taxable transactions.

Spain’s VAT system is fully integrated with the SII (Suministro Inmediato de Información) platform, which requires near real-time submission of invoice data. This ensures a high level of transparency and reduces fraud but also increases administrative complexity for businesses.

Social Security Contributions

Social contributions in Spain, as in Russia, amount to roughly 30% of an employee’s gross salary. However, the structure is broader in Spain, as contributions include mandatory payments toward healthcare, pensions, unemployment insurance, and several other social funds.

The base for calculating these contributions is generally wider than in Russia, and compliance is strictly enforced. Employers bear full responsibility for the accuracy and timeliness of payments. Late or incorrect payments can result in significant fines, while repeated violations may trigger audits or even temporary account freezes.

For self-employed individuals (autónomos), there is also a mandatory contribution system — the cuota de autónomos — which is calculated based on the declared level of income. The minimum monthly contribution is approximately €230, increasing progressively with higher earnings.

Spain’s tax framework demands a high level of financial discipline. It is virtually impossible to run a business without qualified accounting support and consistent tax planning. At the same time, this structure provides transparency, predictability, and confidence from the tax authorities — all essential for stable and sustainable business growth in Spain’s competitive market.

Special Tax Regimes and Opportunities for Optimization in Spain

Spain does not offer the same variety of simplified tax systems as Russia, yet there are still legitimate and effective ways to reduce the overall tax burden. The key difference lies in Spain’s philosophy: rather than minimizing the number of taxes, the Spanish system focuses on transparency, compliance, and controlled flexibility. Instead of simplified regimes, businesses are granted specific incentives and relief measures — particularly for startups, innovative companies, and new residents.

In Russia, entrepreneurs can choose among several special tax regimes — such as the simplified taxation system (STS), the patent system, or the self-employment tax (NPD). These models indeed help to lower the tax burden and simplify reporting obligations.

In Spain, such flexibility does not exist. The country operates under a single taxation model, with limited exceptions for certain categories of taxpayers. However, due to its well-designed system of tax benefits, deductions, and special rates, Spain remains a competitive jurisdiction for doing business, particularly for newly established companies and foreign professionals.

Spain actively supports innovation and R&D projects. Companies investing in research and development can reduce their taxable base by the full amount of qualifying expenses. There are also additional incentives for investments in technology startups, green economy projects, and digital transformation initiatives.

A particularly attractive measure is the tax credit for investment in innovative enterprises (deducción por inversión en empresas de nueva o reciente creación), which allows investors to deduct up to 30% of the invested amount. This mechanism is especially appealing to private investors and venture capital funds focused on the EU market.

Another key element of tax planning in Spain is determining tax residency. A person is considered a tax resident if they spend more than 183 days per year in Spain or have their main economic interests located there.

Obtaining tax residency can be highly advantageous when combined with special regimes for foreign professionals, such as the Beckham Law, which allows a significant reduction of taxes on income earned outside Spain. However, incorrect registration of tax residency status can lead to double taxation, so a professional assessment of tax implications is essential before relocation or restructuring income sources.

In essence, Spain’s approach to tax optimization is based not on shortcuts but on strategic planning, compliance, and the use of lawful incentives. With the right legal and tax advice, businesses can minimize their tax liabilities while remaining fully compliant with Spanish and EU legislation.

The “Beckham Law” in Spain: How Foreign Entrepreneurs and Startup Founders Legally Reduce Their Taxes

One of the most attractive tax optimization tools in Spain remains the so-called Beckham Law — a special tax regime for foreign professionals and entrepreneurs who decide to relocate to Spain. It earned its nickname after British footballer David Beckham, who used this regime to pay taxes only on income earned in Spain rather than on his worldwide income.

Today, the Beckham Law has become one of the key factors that make Spain appealing to international founders, IT specialists, investors, and top executives. It allows individuals to significantly reduce their tax burden and simplify reporting requirements while remaining fully compliant with Spanish tax legislation.

The main advantage of the Beckham Law is a fixed personal income tax rate of 24% on annual income up to €600,000. Income above this threshold is taxed at 47%. The unique feature of this regime is that foreign income — including dividends, interest, investment returns, or profits from business activities outside Spain — is completely exempt from taxation in Spain.

This allows foreign entrepreneurs, startup founders, and investors to conduct international business while retaining tax advantages. Another significant benefit is exemption from filing informative forms (such as Modelo 720, 721, 117, and 114), which are typically mandatory for Spanish tax residents with foreign assets. This exemption considerably reduces administrative work and minimizes the risk of fines.

The regime applies not only to employees of international companies but also to business owners and startup founders, provided that certain conditions are met:

• The individual must not have been a Spanish tax resident during the previous five years.
• The main source of income must be employment income (not income derived from a permanent establishment).
• The move to Spain must be connected to obtaining a position or employment contract. For founders, this may involve being appointed as an administrator of their own Spanish company.

Startup founders holding an Entrepreneur Visa under the Ley de Emprendedores may also qualify for the Beckham Law.

Digital nomads working remotely for foreign companies can benefit from the same regime through Spain’s Digital Nomad Visa.

Spain’s tax system is one of the most detailed and regulated in Europe. It demands diligence, discipline, and a deep understanding of legal and fiscal norms. However, with proper planning and professional assistance, entrepreneurs gain access to a stable and predictable business environment.

Working with a licensed asesor fiscal (tax advisor) helps avoid reporting errors, minimize tax liabilities, and take full advantage of the legal benefits available. For foreign entrepreneurs and startup founders planning to enter the Spanish market, this is not merely convenient — it is a strategic necessity.

A law firm specializing in international clients can assist you with:

• Selecting the most suitable tax regime (including the Beckham Law);
• Properly establishing your tax residency status;
• Filing tax declarations on time;
• Protecting your interests before the Agencia Tributaria in case of disputes.

Spain offers vast opportunities for business, investment, and quality of life — but to take full advantage of them, you need a well-structured tax strategy and professional support.

Our law firm will help you choose the optimal tax regime, prepare all necessary documentation, and build a transparent, legally sound business structure in Spain.

Contact us for a consultation to start your path toward successful relocation and tax efficiency.