The IAE (Tax on Economic Activities) is a local tax that affects anyone who carries out any economic activity in Spain (both individuals and legal entities).
In this article we will explain how you can save money by paying this fee.
What is IAE?
As we have said, this is a local tax (it is managed by the municipalities). This does not detract from the fact that the State administration uses the information collected for the purposes of controlling other taxes (income tax and VAT).
The tax period is the calendar year and everyone is required to register. It is important to know it well because it conditions the way in which you will pay taxes. Only legal entities with a net turnover of more than one million euros will have to pay this tax, so the vast majority of the population is not affected by this tax (and among this small group, there is an exemption during the first two years of activity). However, those who are obliged to pay significant amounts can save significant amounts of money if they are registered under the correct heading.
Variables affecting IAE payment
The amount to be paid depends on two variants. The first thing that will determine the amount to be paid is the epigraph with which your economic activity corresponds (in other words, the one you have chosen). On the other hand, as it is a local tax, it depends on the Town Hall in which the entity is domiciled (the different town halls mark the voluntary payment periods by means of an ordinance).
Epigraphs of the IAE
The headings are divided into three main groups: business, professional, or artistic activities. It should be kept in mind that certain activities are reflected in both business and professional activities. The difference usually lies in the way you carry out your professional activity, as well as the structure you create around it.
The trick is to know which one is right for you to sign up for. In fact, you can do it in more than one, or even in the so-called container epigraphs (if you consider that none is similar to the activity that your company carries out). In addition, it must be said that the epigraphs are quite outdated, so it is often difficult to decide which is appropriate.
We recommend that you contact a professional consultant to advise you. There are many variables that influence to save you a significant amount of money. At Ayming, we are willing to study your case: contact us.