Guide to Doing Business in Asturias 2024
Taxation on indirect manifestations of economic capacity in Spain is configured through two taxes: VAT and ITPAJD (Tax on Property Conveyances and Documented Legal Acts).
VAT is a tax of an indirect nature, harmonised at European Union level, eminently business-related and affecting consumption.
The geographical scope of application of the Tax is Spanish territory. However, for these purposes, the territories of the Canary Islands, Ceuta and Melilla are excluded.
In the Canary Islands, the General Indirect Tax of the Canary Islands is applied (IGIC), whilst in Ceuta and Melilla the Tax on Production, Services and Imports is applied.
VAT taxes three types of operations:
The accrual is determined when an operation is deemed to have been carried out. In general, in other words, when the power of disposal over the delivered good is transferred or when the service is provided.
Taxpayers, in general, are natural or legal persons who have the status of entrepreneurs or professionals and who deliver goods or provide services subject to the Tax.
The Taxpayer is obliged to charge the VAT to the recipient of the operations, unless the latter is exempt, self-assess it and pay it.
However, on certain occasions or cases regulated by the Law, what is known as the Reverse Charge of the Taxpayer occurs, in other words, the recipient of the operations becomes the Taxpayer, provided that he acts as an entrepreneur or professional in Spain.
There is the possibility of applying tax exemptions, for various reasons and under various assumptions and conditions. They are normally applied directly by the entrepreneurs and professionals who carry out the operations. In this way, VAT is not charged nor is there any right to deduct the VAT paid (although there are exempt operations which do grant the right to deduction). Some affect certain sectors of activity: i.e. real estate, education, health, financial and insurance); and others, certain taxpayers.
Through a series of localisation rules, it is determined when a specific operation is subject to VAT in Spain.
In general, deliveries of goods are understood to be located in Spain if this is the place where they are made available. However, if transportation is involved, they are assumed to be located at the place where said transportation begins. Furthermore, there are other exceptions to the general rule, which it is recommended to review in detail depending on the operation to be carried out.
Regarding the provision of services, we must differentiate depending on whether the recipient is an entrepreneur or professional (operations of the type Business to Business “B2B") or an end consumer (operations of the type Business to Consumer “B2C"). In the former case, they will be assumed to be carried out, in general, at the registered office or establishment of the recipient, whilst in the latter case, in general, at the location of the registered office of the provider (origin). However, there are exceptions to the general rule (for example, services related with real estate are assumed to be performed at the place where the property is located).
In general, it is formed by the consideration paid.
There are three types of rate:
| GENERAL | 21% | Applicable to most operations |
|---|---|---|
| REDUCED | 10% | |
| HIGHLY REDUCED | 4% | |
| EXCEPTIONAL | 0% | It was approved due to the crisis caused by COVID-19 for certain health products. It is now applied to certain foods due to the rise in prices brought about by Russia's invasion of Ukraine. |
For the deduction of VAT payments made, certain requirements must be met: objective, subjective and final. Furthermore, even if the above is met, there are some limitations, exclusions and restrictions on the right to deduct which must be taken into account.
The pro rata rule (percentage deduction of VAT paid), will thus apply when the Taxpayer, during the course of its business or professional activity, jointly supplies goods or services that give rise to the right to deduction and other operations of a similar nature which do not qualify for the exercising of the aforementioned right. The limitation of the right to deduct the VAT paid represents a cost to be taken into consideration in any possible investment.
VAT is filed periodically, either monthly or quarterly (depending on a series of characteristics or options) by completing Form 303. Additionally, an annual summary information return must be submitted by completing Form 390.
The IPTAJD is a tax of an indirect nature, all-encompassing (it includes, as we will see, three “modalities”, which could well be differentiated taxes) and which, unlike VAT, represents a cost for the Taxpayer when he is an entrepreneur or a professional.
As has already been mentioned, the ITPAJD encompasses three different modalities, which are:
For these purposes, it is appropriate to make clear that the TPO modality is incompatible with the OS modality, in other words, the same act can never be settled under both concepts. Furthermore, both modalities (TPO and OS) are incompatible, in notarial documents, with AJD (%).
We are going to study each of them separately and, in addition, we will point out some common rules.
This modality taxes both “inter vivos” transfers for a consideration of goods and rights and the formation of rights in rem, loans, bonds, leases, pensions and administrative concessions, except when the objective of the latter is the transfer of the right to use railway infrastructures or properties or facilities at ports and airports.
The Taxpayer will be, by way of illustration and not limited to:
The Taxable Income will be formed by the value of the transferred asset or the right that is created. Only charges that reduce the value of the assets will be deductible, but not debts, even if they are guaranteed by a pledge or mortgage.
For these purposes, the market value will be used, unless the Law determines otherwise (for example, for real estate the reference value will be taken as from 2022). However, if the declared value, the agreed price or consideration or both are higher than the market value, the higher value will be assumed (also in the case of real estate).
The tax payable will be obtained by applying the tax rate to the Taxable Income. So, in relation to movable or immovable property (except for security rights in rem), the rate approved by each Autonomous Community will apply. For these purposes, in the case of movable property in Asturias, the generally applicable rate is 4% (although a rate of 8% applies to transfers of passenger and off-road vehicles that exceed 15 fiscal horsepower, vessels which are more than 8 metres long and works of art and antiques), whilst in the case of real estate, the applicable rate depends on the value of the good or right in question. Hence:
| TIPO | VALOR DEL BIEN O DERECHO |
|---|---|
| 8% | menor o igual a 300.000 €. |
| 9% | superior a 300.000 € y menor o igual a 500.000 €. |
| 10% | supera los 500.000 €. |
There are certain specialised areas though which have been summarised below:
| TIPO | |
|---|---|
| 6% | a la transmisión de viviendas situadas en zonas rurales en riesgo de despoblación. |
| 3% |
(i) a las viviendas calificadas de protección pública por el Principado en cumplimiento de una serie de requisitos (i.e. se vayan a utilizar como vivienda habitual por el adquirente); (ii) a los inmuebles incluidos en la transmisión global de empresas individuales o negocios profesionales, siempre que concurran una serie de circunstancias; (iii) a las transmisiones onerosas de determinadas explotaciones agrarias (iv) a la segunda o ulterior transmisión de viviendas cuyo destino sea el arrendamiento de vivienda habitual a una empresa en las que sean de aplicación las normas de adaptación del Plan General de Contabilidad al sector inmobiliario, en cumplimiento de una serie de requisitos. |
| 2% | a las transmisiones en que se haga uso del derecho a la exención del IVA (acto conocido coloquialmente como la “renuncia a la renuncia”). |
However, if it involves the formation of security rights in rem, pensions, bonds or loans, as well as the assignment of credits, the applicable rate is the State rate, 1%. Furthermore, leases and the transfer of securities are taxed in accordance with the provisions of State law.
Finally, accrual occurs on the day on which the encumbered act or contract is carried out.
This modality taxes the constitution and dissolution of companies, as well as the increase and decrease in their capital, in addition to the contributions made by partners that do not entail an increase in share capital and the transfer to Spain of the effective management office or registered office of a company when neither one nor the other was previously located in an EU Member State (unless any case of non-submission or exemption of those that will be detailed below applies).
The Taxpayer will be:
The Taxable Income will be made up of:
The tax payable will be obtained by applying the tax rate of 1% to the Tax Base. In any case, in several cases said taxation does not become effective due to cases of exemption or non-submission (e.g. restructuring operations are not subject to OS while the incorporation of companies is an exempt operation, as we will see below).
Finally, the accrual occurs on the day the act subject to tax is formalised.
This modality, in turn, is divided into three:
Furthermore, the accrual occurs, as under the previous modality (OS), on the day the act subject to tax is formalised.
A. AJD-DN
It taxes the deeds, certified notarial documents and certificates. The Taxpayer is the party who acquires the asset or right and, failing that, the parties who promote or request the notarial documents, or those in whose interest they are issued. So, when it comes to loan deeds with a mortgage guarantee, it will be the lender. The Taxable Income will be made up of the declared value, on the first copies of public deeds that have as their direct object a valuable amount or thing, without prejudice to administrative verification. However, as regards security rights in rem and in the deeds documenting secured loans, it will be formed by the amount of the obligation or capital secured.
The tax payable, as has been said, is divided into two: a fixed payment and a variable payment. The fixed payment taxes the originals and copies of the notarial acts and deeds, as well as the certified copies at €0.30 per document or €0.15 per folio (for headed paper, basically). In turn, the variable payment taxes the first copies of deeds or notarial acts, when the following requirements are met:
The tax rate applicable to the Tax Base in Asturias is, in general, 1.2%.
There are certain specialised areas though which have been summarised below:
| RATE | |
|---|---|
| 1,5% | is applied to loans with a mortgage guarantee, as well as transfers in which the VAT exemption is waived. |
| 0,3% |
(i) in the transfers of public protection housing, in compliance with certain requirements; (ii) in relation to declarations of new construction or horizontal division of buildings intended for rental housing for habitual residence, in compliance with certain requirements; and (iii) second or subsequent transfers of homes to companies to which the rules of adaptation of the General Chart of Accounts to the real estate sector apply, in compliance with certain requirements. |
| 0,1% | is applied for the formation and cancellation of security rights in rem when the Taxpayer is a Mutual Guarantee Association with its registered office in the Principality. |
B. AJD-DM
This taxes bills of exchange, documents that perform a money transfer function or replace them, receipts or certificates of transferable deposits, as well as promissory notes, bonds, debentures and other similar securities issued in series, for a term not exceeding eighteen months, representing foreign capital for which a consideration is paid determined by the difference between the amount paid for the issue and the amount committed to be repaid upon maturity.
The Taxpayer with regard to the bills of exchange is the drawer, unless the bill of exchange was issued abroad, in which case it will be their first holder in Spain. In turn, the Taxpayer of the draw bills or bills replacing the bills of exchange, as well as the deposit receipts and promissory notes, bonds, debentures and similar securities issued in series, is the person or entity that issues them.
The Taxable Income will be made up of the amount drawn in the bills of exchange and the nominal amount in the certificates of deposit. In turn, with promissory notes, bonds, debentures and other similar securities, issued in series, representing foreign capital, for which a consideration is paid determined by the difference between the amount paid in the issue and the amount committed to be repaid upon maturity, the Taxable Income will be formed by the amount of capital that the issuer undertakes to reimburse.
The tax payable on bills of exchange and documents that perform a draft function or replace bills of exchange and certificates of deposit will be carried out in accordance with the scale provided in article 37 of Royal Legislative Decree 1/1993 of 24 September which approves the redrafted Text of the Law on Property Conveyances and Documented Legal Acts (LITPAJD). In turn, promissory notes, bonds, debentures and other similar securities, issued in series for a term not exceeding eighteen months, representing foreign capital, for which a consideration is paid determined by the difference between the amount paid upon issuance and that committed to be repaid upon maturity, will be taxed at the rate of €18.0304 for each €6.01 or fraction thereof, which will be settled in cash.
C. AJD-DA
This taxes the rehabilitation and transfer of peerages and titles, as well as the preventive annotations that are carried out at public Registries, when their object is a valuable right or interest and they are not ordered ex officio by the competent judicial or administrative authority.
The Taxpayer is: (i) with regard to peerages and titles, their beneficiaries; and (ii) in the annotations, the person who requests them.
The Taxable Income in the preventive annotations will be formed by the value of the right or interest which is guaranteed, published or formed.
The tax payable on peerages and titles will meet the rights of the scale set out in article 43 LITPAJD (which is why there is no Taxable Income). However, the tax payable on preventive annotations will be 0.50%.
D. Common regulations
With ITPAJD, the exemptions are common to the three types of Tax that we have seen and are regulated in art. 45 LITPAJD. Some examples are (subjective - according to the person - and objective - according to the act or contract-):
The ITPAJD is filed in Asturias by completing Form 600. Hence, the submission period is 30 business days as from such time as the act or contract is created.