Spanish Tax Laws & Regulations
At Bradford Jacobs, our Employer of Records (EOR) platforms provide reliable solutions for companies wishing to establish their presence in the Spanish economy. From the first steps of setting up operations to ensuring compliance with the local payroll laws and regulations, we offer dedicated Spain Payroll solutions that can be personalized to your requirements.
We aim to make business expansion easy. At Bradford Jacobs, we navigate the administration of the Spain payroll system for you, and we also make the returns and associated payments for income tax and social security contributions directly from our payroll system to the local tax authorities. We do the work, so you do not have to.
We appreciate that all companies have their own challenges, and that’s what we do best! We provide dedicated Spanish payroll solutions customized to your specific needs. Let us help you speed up the process and keep you ahead of the game. We are just a click away.
When expanding into a new country, you may encounter some challenges regarding payroll, but allow us to take the reins and answer any of your questions and concerns with our trusty guide on payroll for Spain.
What Spain Payroll Options are available for Companies?
- Remote payroll – This option allows businesses to operate under a single payroll system, by adding employees in Spain to your parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
- Internal payroll – You may operate payroll from your subsidiary, especially if you are committed to growing your company’s presence in Spain. However, this does require hiring dedicated HR staff who understand Spanish employment and compliance laws.
- Spanish payroll processing company – If you are considering outsourcing, then working with a Spanish payroll company will help in processing your payroll – but not when it comes to compliance.
- Spanish payroll outsourcing – However, there is another option available which solves both concerns – by working with Bradford Jacobs. We can handle both your payroll and compliance for all your employees in Spain. We take the administrative stress off your shoulders so you can focus on what you do best.
Spain Payroll Services
There is no simple solution when it comes to operating payroll in Spain. In dealing with most bureaucracy, you need expertise to unravel the red tape. The smart move is to find the right people to be your experts while you concentrate on driving your business forward.
Running payroll in Spain requires an understanding of employment and tax laws and how it affects personal and corporate taxation, social security contributions, pension deductions and so forth. In fact, most aspects of ‘working’ shapes payroll and what we all want to know is ‘the bottom line’ – what’s in your pay-packet, business costs and getting it wrong can lead to fines and an unhappy workforce. Here are some of the outsourced payroll services that need to be dealt with:
- Applying for a trading name
- Applying for a foreigner’s tax registration number
- Registering with the national trade registry (Registro Mercantil Central, RMC)
- Deciding on a type of company
- Recording the daily working hours of all employees, following implementation of a law in May 2019
- Registering employees’ contracts with the social security authorities before employment starts
- Registering employees’ contracts with the Public Employment Service
- Complying with national minimum wage as laid down by the Ministry of Employment and Social Security
- Withholding national and regional tax from employees’ salaries
- Making monthly contributions to Spain’s National Social Security Institute
- Opening a company bank account after producing the correct documentation
- Creating employment contracts
- Applying special expatriation status (if applicable)
- Calculating monthly salary and creating pay slips and completing tax returns
- Researching available tax-free allowances
What is required to set up Payroll in Spain?
Before a company can operate payroll in Spain it must follow strict procedures to set up a subsidiary. These include:
- Obtaining a company Tax Identification Number (Certificado de ldentificacion Fiscal, CIF)
- Applying for certificate of denomination for the subsidiary from the Commercial Registry (valid for six months)
- Opening Spanish bank account to deposit share capital and receive disbursement certificate
- Presenting public deeds of incorporation before a notary, including bank certificate, certificate of denomination, company bylaws and identity of managers
- Presenting the D1-A form for declaring foreign investments to the Registry of the Directorate General for Trade and Investment at the Ministry of Economy
- Applying for final registration of public deed of incorporation in the Commercial Registry (usually within 15 days)
- Receiving the final CIF from the Commercial Registry
- Completing census registration for tax, VAT, social security etc.