Credit Management March 2024

COUNTRY FOCUS
nearly 1m jobs. Overall, there are around 218,000 companies
in this business. Areas of interest include retail returns
handling, green logistics, ecommerce and allied solutions,
and increasing usage of rail for freight.
Renewable Energy
The government enacted the Law on Climate Change and
Energy Transition to lower carbon emissions by 2050. There
are two phases – the first to 2030 demands the generation
of at least 74 percent of electricity from renewables and the
improvement of energy efficiency by 35 percent. Phase two
from 2050 demands 100 percent of energy from renewables.
Latest data shows Spain generated 46.7 percent of energy from
renewables in 2021. Opportunities lie, not unsurprisingly, in
increasing photovoltaic generation from 4.8GW in 2015 to
36GW by 2030 and wind power – there are presently 21,500
wind farms. There are 237 industrial centres, 20 research
centres and nine universities involved in wind power.
Tourism and leisure
This remains very important for Spain. According to the
World Tourism Organisation and World Travel & Tourism
Council, in 2019 Spain received 81.8m visitors who spent
$6.81bn. The Instituto Nacional de Estadística reckoned that
by 2022 it generated 11.6 percent of GDP worth €155.94bn
and employed 1.95m people.
Opportunities exist in travel tech such as cloud solutions
(ecommerce and data mining), mobile technologies, the
Internet of Things (automation of products and services),
social networks and communication. Other areas of interest
are culture, health and gastronomic tourism, and corporate
tourism for conferences and exhibitions.
Tax
The general corporate tax rate in Spain is 25 percent, but
other tax rates may apply, depending on the type of company
that is taxed and its business. Resident companies are taxed
on their worldwide income.
Newly created companies are taxed at 15 percent for both the
first tax period in which they make a profit and the following
tax period. This only applies to companies that carry out
business activity or newly created companies that are part
of a national or international group. This reduced rate may
not apply if the company's business activity was previously
carried on by a related company or individual.
Companies that qualify as start-ups may apply a 15 percent
tax rate in the first tax period in which the company generates
a taxable income and in the following three periods, if they
still qualify as a start-up.
There is a minimum taxation rule for companies whose net
turnover in the 12 months prior to the date in which the tax
period began was at least €20m, and for taxpayers who are
taxed under the special tax consolidation regime for CIT
purposes, regardless of net turnover amount.These taxpayers’
net corporate tax will be at least 15 percent of the entity’s
taxable profits before deductions and other tax credits.
xMadrid, Spain's central capital, is a city of elegant boulevards and
expansive, manicured parks such as the Buen Retiro. It’s renowned for its
rich repositories of European art, including the Prado Museum’s works by
Goya, Velázquez and other Spanish masters.
Personal
Residents in Spain are generally subject to income tax on
their worldwide income, regardless of where it is generated,
which is taxed, at progressive rates. Non-residents are subject
to tax only on their Spanish-source income. Tax is not levied
on employment income obtained by those who are tax
resident in Spain for work carried out outside Spain up to a
limit of €60,100 if certain conditions are met.
There are six bands of income tax starting with a 19 percent
band on the first €12,450. Between €12,451 and €20,200 the
rate is 24 percent; between €20,201 and €35,200 it’s 30 percent;
from €35,201 to €60,000 it’s 37 percent; from €60,000 to
€300,000 the rate is 45 percent; and beyond €300,000 tax is
charged at 47 percent.
Summary
Spain is on the UK’s doorstep and offers a great climate to
do business in – both economically and meteorologically
speaking. With a large economy that has coped with
downturns and COVID, it’s worth investing some time there.
Author: Adam Bernstein is a freelance
finance writer for CM magazine.
Brave | Curious | Resilient / www.cicm.com / March 2024 / PAGE 28