Spanish accounting regulations are contained in the Commercial Code and Corporations Law and they oblige all companies to record every economic transaction appropriate to their activity.
The Instituto de Auditores-Censores Jurados de Cuentas de España is the official accountancy body, which is responsible for accounting and auditing standards throughout Spain. However, on 1st January 2005, the entire Spanish accounting system changed, and Spanish-listed companies must now conform to International Accounting Standards (IAS), in order to bring them into line with EU regulations on accounting procedures. You can obtain a copy of the IAS from The International Accounting Standards Board (www.iasb.org ).
Before you can start trading, you must obtain accounting books and take these to the Mercantile Registry office closest to the registered office of your business to have them stamped – and so made legal before you undertake any business activity. You should obtain advice from your financial adviser on the books that are required for your particular business.
In addition to accounting books, the company must have a minutes book ( libro de actas), which records agreements taken at annual general meetings. If your business is an SL you must record the contributions of each shareholder in a libro de registros de socios and you also need a personnel registration book ( libro de matricula), which proves that your staff have been registered with the labour authorities and which must be shown to inspectors when they visit your premises.
Once you start trading, you must file an annual self-assessment tax return. This must be submitted within 25 days of the six-month period that follows the end of your fiscal year. For example, if your fiscal year runs from 1st January to 31st December, you must file for that period within 25 days of 1st June the following year. In addition, you must make quarterly payments in lieu of your annual return during the first 20 days of April, October and December. The amount you must pay is fixed at 18 per cent (or 25 per cent if your turnover exceeds € 6,010,121).
When you submit your annual return, the amount you’ve paid in advance is deducted from the amount you owe. You must also submit corporate tax forms, financial statements and inventories annually to the Mercantile Register. A good financial adviser will fill out the relevant accounting books and submit everything on your behalf.
This article is an extract from Making a Living in Spain. Click here to get a copy now.