Who is obligated to withhold and pay tax to the Spanish Treasury?

Businesses, professionals, and employers that have purchased or contracted services in the course of carrying out economic activity in Spain are obligated to withhold tax.

Incomes most commonly subject to withholding tax are as follows:

  • Tax on workers for each payroll
  • Tax on lease invoices of landlords and property owners that lease for economic activity
  • Tax on invoices for freelance services rendered
  • Tax on invoices sent to certain entrepreneurs (individual persons) carrying out specific activities
  • Tax on the payment of dividends of a financial nature to partners or interest on some loans received.

Private customers who are not engaged in economic activity, i.e. customers who are not  companies, professionals or entrepreneurs, are not obligated to withhold taxes.

In addition, sales invoices do not include tax if the client is an individual.

Who should apply the tax?

The obligation to withhold tax and pay it to the Spanish Treasury belongs to the paymaster. If a client receives an invoice from a provider with a miscalculated tax or not including a tax when it should have, the person responsible for administrating the tax will be the recipient of the invoice and not the one who issued it.

Business providers do not have any responsibility beyond providing the certificates required by law.

If you need additional information regarding tax obligations in Spain,

Please note that this article is not intended to provide legal advice.

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