Contributed By Cases & Lacambra
Individuals who reside in Spain or who currently hold investments in Spain are subject to taxes such as the Wealth Tax and the Inheritance and Gift Tax (IGT), as well as the Personal Income Tax (PIT). Non-resident individuals may be subject to taxes in Spain on their Spanish-source income and assets, notwithstanding any applicable tax treaty provisions and internal tax reliefs.
For the 2023 and 2024 tax years, the Spanish government has introduced a second wealth tax named impuesto temporal de solidaridad de las grandes fortunas (Solidarity Wealth Tax, or SWT) aimed at charging natural persons (residents and non-residents) who own at least EUR3 million in net assets (worldwide in the case of Spanish tax residents and located in Spain in case of non-residents). This shall apply in addition to the Wealth Tax (WT), but allows for the individual's Wealth Tax burden to be deducted against their SWT liability.
However, the Spanish legal system contains alternatives for reducing the tax burden linked to investments carried out by individuals, which are mainly related to family-owned businesses (so-called “family business reduction(s)”).
Spanish Tax Residents
Personal Income Tax
The PIT is determined upon the individual’s worldwide income – employment income, salary as a member of a board of directors, dividends, capital gains, interest, rental income, etc, regardless of where such income is derived and who is the payor.
The individual’s taxable income is reduced by several deductions and allowances based on personal and family status.
Spanish PIT distinguishes between two types of taxable income: general taxable income and savings taxable income. The main difference is in the tax rates.
Savings taxable income is taxed at the following rates:
General taxable income is taxed at progressive rates ranging from 18.5% to 54%, depending on the autonomous region within Spain in which the taxpayer resides.
Savings taxable income results from the aggregation of dividends, interest and capital gains derived from the transfer of assets. General taxable income results from the aggregation of movable property income that may not be characterised as savings income, employment income, business activities income, rental income or attributed deemed income.
The PIT Law stipulates that individuals who become Spanish tax residents as a consequence of a work contract or as a result of acquiring the status of director of a Spanish entity are entitled to a flat rate as if they were non-residents despite becoming Spanish tax residents. As of the commencement of 2023 tax year, this impatriate regime has been slightly modified, widening the applicable cases and softening some of its requirements.
Individuals under this regime are taxed at a flat rate of 24% for income up to EUR600,000 and at a flat rate of 47% for income above that threshold.
In general terms, the application of the impatriate regime requires the taxpayer to meet the following conditions:
This tax regime is effective from the tax period in which the individual acquires Spanish tax residency and for the following five tax years.
The Wealth Tax is a direct tax that is levied upon the personal net wealth of individuals, due on 31 December each year.
However, the Wealth Tax Act includes an exemption of EUR300,000 for permanently domiciled individuals and a general rebate of EUR700,000. Furthermore, to the extent that the Wealth Tax is managed by the Spanish autonomous regions, each region sets forth different deductions, reductions and exemptions, separate from the general deductions, reductions and exemptions regulated at the national level. Therefore, effective liability to the Wealth Tax depends on the autonomous region’s legislation that applies to the specific case, depending on the autonomous region where the individual is tax resident.
As of 1 January 2023, the holding of real estate located in Spain through non-listed non-resident entities is subject to the Wealth Tax, provided that more than 50% of the net asset value of said non-resident entity is comprised, directly or indirectly, of real estate located in Spain.
In late 2022, the Spanish Government approved the SWT as a temporary tax measure for the 2023 and 2024 tax years. However, the SWT law itself contains a clause permitting its application to be revisited and enabling it to become a permanent tax.
The SWT taxes individuals (Spanish tax residents and non-residents) owning net assets of at least EUR3 million. However, Spanish tax residents can benefit from an exemption for the first EUR700,000, thereby raising the threshold to EUR3.7 million. For non-resident individuals, only those assets located in Spain will be considered as part of the taxable base. However, they cannot benefit from the EUR700,000 exemption.
The taxable base is determined according to the same terms as the Wealth Tax, though applying a different scale that is as follows:
Spanish tax residents can benefit from a limitation on the tax quota of the SWT, as one's tax liabilities under the SWT, PIT and WT may not exceeded 60% of the PIT’s taxable base. However, a minimum of 20% of the SWT's liability will apply in any case, without prejudice of deducting the WT liability as the case may be.
Finally, it must be noted that there are many doubts about SWT’s constitutionality, due to:
Inheritance and Gift Tax
Inheritance and Gift Tax (IGT) is levied upon the transfer of property as a consequence of a person’s death (ie, mortis causa) and from the transfer of property without consideration. Tax liability shall be determined considering the real value of the assets and rights being transferred, and personal circumstances are taken into account to determine the final tax burden (kinship, age, previous net wealth of the acquiror, autonomous region of residence of the transferor and of the acquiror, etc).
Spanish-sourced income and capital gains derived by individuals who are not considered tax residents in Spain are subject to Spanish Non-Resident Income Tax (NRIT), notwithstanding the application of the provisions set forth in the tax treaties entered into by Spain with third-party states.
Spanish-sourced income and capital gains include the following:
Nevertheless, NRIT-paying individuals may be considered taxpayers for Wealth Tax purposes, although only upon assets and rights that are located or may be exercised or fulfilled within Spanish territory, as well as in connection with amounts received as a result of life insurance contracts formalised with Spanish insurance companies or that have been formalised in Spain with foreign insurance companies, with some particularities.
A general EUR700,000 Wealth Tax exemption is available to non-residents. Nevertheless, this exemption is not available in respect to the SWT for high net worth individuals.
Provided that certain requirements are met, individuals are entitled to apply for an exemption from Wealth Tax and IGT for family-owned businesses. Such exemption requirements may vary depending on the autonomous region in which the entrepreneur, shareholder or beneficiary is a tax resident.
Subject to the fulfilment of certain conditions, the transfer of shares in a Spanish entity (including holding entities upon fulfilling additional requirements) may benefit from a 95% tax allowance for IGT and a 100% allowance for Wealth Tax.
Subject to the fulfilment of certain conditions, setting up a Spanish holding entity may result in an efficient instrument from a tax standpoint as it may qualify for Wealth Tax and IGT exemptions, while dividends and capital gains derived from share transfers may benefit from the Spanish participation exemption regime, by means of which a 95% exemption applies if certain requirements are met. The main requirements are as follows:
From a direct taxation standpoint, the acquisition of a residential property in Spain is not a taxable event by means of which the acquiror becomes liable for NRIT based on the sole effect of this acquisition. Nevertheless, non-residents owning a real estate property located in Spain are subject to NRIT either on rental income or on a deemed income (if the asset is not rented).
Deemed income will be calculated as 1% or 2% of the real estate’s cadastral value. The cadastral value is an administrative value assigned to the property by the authorities and is not necessarily connected or referenced to the fair market value of the asset.
Only NRIT taxpayers that are resident in another EU Member State may deduct expenses incurred in the obtaining of Spanish-source income, provided these are strictly related to the activity undertaken in Spain.
The NRIT tax rate for income derived from immovable property is 24% (19% for NRIT taxpayers that are resident in another EU Member State or in a country within the European Economic Community with which there is an effective exchange of information).
Real estate located in Spain that is directly owned by non-resident individuals is subject to Wealth Tax. Nevertheless, to verify the effectiveness of taxation for Wealth Tax purposes, each case shall be analysed in accordance with the provisions set forth in the relevant tax treaty of application.
Furthermore, the tenancy and transfer of real estate located in Spain may be subject to some local taxes, such as property tax or tax on the increase of urban land value.
Real estate that is located in Spain and inherited by a non-resident will be subject to Inheritance Tax.
However, non-residents that inherit shares in a non-Spanish entity holding real estate located in Spain could be subject to Spanish Inheritance Tax if the assets of said company are mainly (ie, more than 50%) comprised, directly or indirectly, of real estate located in Spain. General anti-abuse provisions set forth by the Spanish tax legislation may apply.
The so-called “white book on Spanish tax reform” was published in March 2022. This “white book” was drafted by a panel of tax experts consulted by the Spanish government, and, among other items, it drafted the main blueprints for a potential reform of Wealth Tax and IGT.
Only Wealth Tax has been impacted by means of the new Solidarity Wealth Tax for high net worth individuals, resulting in a higher Wealth Tax (in broad terms) burden for taxpayers residing in certain autonomous regions (mainly Andalucía, Madrid and Galicia).
No amendments have been implemented by the government in respect of IGT.
The Spanish tax authorities have significantly increased scrutiny of the following areas.
DAC6 aims to increase transparency and fairness in taxation. The law for the transposition of DAC6 was published on 30 December 2020.
DAC6 implements Action 12 of the OECD BEPS Project, which provides recommendations for the design of rules to require taxpayers and advisers to disclose aggressive tax planning arrangements. These recommendations seek a balance between the need for early information on aggressive tax planning schemes and a requirement for disclosure to be appropriately targeted and enforceable, avoiding placing undue compliance burdens on taxpayers.
DAC6 applies to cross-border tax arrangements that meet one or more specified characteristics (Hallmarks), and concern either more than one EU country, or an EU country and a non-EU country. It mandates a reporting obligation for these tax arrangements if they are within its scope, regardless of whether or not the arrangement is justified according to national law.
The final regulation to complete the transposition of DAC6 was approved in April 2021, and the obligation to disclose cross-border mechanisms – to which any of the Hallmarks listed in Annex IV of Directive 2011/16/EU apply – has since been in force.
Failure to comply with DAC6 could lead to significant penalties under local regulations and reputational risks for businesses, individuals and intermediaries.
ATAD 3 introduces a system of indicators of minimum substance (the “gateways”) with which legal entities resident in the EU, regardless of their legal form, and engaged in an economic activity, must comply. If such minimum substance indicators are not fulfilled, the company qualifies as a “shell company”.
To determine whether the minimum of three cumulative conditions (“gateways”) are fulfilled, ATAD 3 establishes the following test:
The consequences of not fulfilling the minimum substance indicators are that the shell company:
Certain listed companies, certain regulated companies (eg, UCITS, AIFs or AIFMs) and domestic holding companies are excluded from the application of ATAD 3.
ATAD 3 should enter into force on 1 January 2024. The final wording of the Spanish transposition into domestic law is still pending confirmation.
Spain signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) on 7 June 2017, together with 67 other jurisdictions.
On 13 July 2018, the Spanish Council of Ministers approved the MLI as a starting point of the internal ratification process. Invoking Article 35.7 of the MLI, Spain decoupled the date of effect of the MLI from the date of its entry into force, meaning that the effects of the MLI would not begin until Spain notified the MLI Depositary. The notification issued by Spain was received by the Depositary on 1 June 2022.
Spain has played an active role in discussions of the BEPS Action Plan. In particular, the Spanish tax authorities have participated in several negotiations in international forums regarding the content and implementation of the BEPS programme, resulting in a package of 15 measures to be implemented in both European and domestic legislation.
As a result, and even though the BEPS Actions may be considered soft law (the OECD final reports on each Action are merely legal recommendations), Spain intends to transpose most of the BEPS Actions into its domestic legislation.
In general terms, most actions taken by Spain were reflected in the last CIT reform, which entered into force in 2015, with the most important amendments to Spanish domestic legislation being as follows.
Within this environment, the Spanish government introduced an obligation for Spanish corporations to file a Country-by-Country Report for fiscal years commencing as of 1 January 2016.
Country-by-country reporting is required from:
However, country-by-country reporting will not be required of entities if this reporting obligation has been fulfilled by the relevant parent entity in its relevant jurisdiction, provided that the conditions set forth in Council Directive 2016/881 of 25 May 2016 are met.
Any entity resident in Spanish territory that forms part of a group that is obliged to carry out country-by-country reporting must notify the Spanish tax administration of the identification and tax country of residence of the entity within the group that is effectively obliged to prepare and submit this information. This notification must be made every year before the end of the tax period to which the information refers, and must include the identification of the entity obliged to report it and whether this is carried out depending on the parent entity, obliged affiliate entity or subrogating entity.
VAT Immediate Supply of Information System
2018 was the first complete fiscal year in which the Immediate Supply of Information system applied, according to which VAT taxpayers are required to file electronically and in real time the information related to invoices issued or received during their activity. Due to this system, the tax authorities have immediate access to all the information related to the operations carried out by Spanish entities, thereby strengthening the existing electronic control systems in the hands of the tax authorities.
This special regime is mandatory for:
In general terms, the Spanish succession regime has remained unchanged for decades (or even centuries), so it seems to be quite outdated in terms of the new family models that have emerged over the last 20 years.
The Spanish succession regime varies depending on the autonomous region where the deceased is resident for civil law purposes, which may not coincide with tax residence for succession purposes (which in turn may differ from tax residence for PIT purposes).
Regardless of the particularities that may apply to the succession in light of the applicable regional or local civil legislation in this field, in general terms close blood relatives are well protected for succession purposes as the donor is obliged to transfer at least two thirds of the total estate to those relatives (a quarter in some regions).
On the other hand, spouses are generally not well protected as they may only acquire the legal usufruct of the estate in the case of intestate succession.
Alongside the making of wills, family protocols have emerged over the last 15 years as a useful succession planning tool aimed at protecting and preserving family-owned businesses. In Spain it is very rare for such businesses to survive the third generation.
Spain has entered into three tax treaties concerning succession, with Greece, France and Sweden, so there is not too much leeway for international planning from a Spanish succession law perspective.
In fact, international tax planning is usually focused on the repatriation of funds in an efficient manner from a direct tax perspective (mainly dividends, interest and capital gains) without prejudice to the structuring of investment in Spain through non-resident entities, which, in certain cases, can be efficient from a Wealth Tax and IGT perspective.
The Spanish succession regime differs depending on the personal civil residence of the deceased. In this context, the autonomous regions of Aragon, the Basque Country, the Balearic Islands, Catalonia, Galicia and Navarre have their own civil regulations in terms of succession, which differ from the general succession regulations applicable in the rest of Spain.
However, only Navarre and some locations in the province of Alava (within the Basque Country) have some exceptions to the general rule of forced heirship in favour of descendants.
Depending on the regional applicable law, descendants are entitled to either at least a quarter or at least two thirds of the estate.
Except in some locations in the Basque Country and the Balearic Islands, the surviving spouse has the right to the usufruct of the estate.
For those individuals that die without progeny, the Spanish common succession regime and the legislation applicable in Catalonia and the Balearic Islands mandate the compulsory heirship of surviving parents or any other surviving ascendant with respect to at least a quarter of the estate, depending on whether they come to an agreement with the surviving spouse.
The default regime of marital property depends on which autonomous region’s regulations apply to the marriage.
Under Spanish common civil law, the marriage property regime is community of property (sociedad de gananciales), which implies that spouses jointly own not only all assets and rights but also all income earned by the spouses during the marriage, although for tax purposes income derived from personal work may be imputed only to the relevant individual that obtained it.
In general terms, the acquisition of assets by means of a donation or succession involves the updating of the value of the assets and rights being transferred.
The acquiror may only not update the value of the assets and rights acquired in the case of donations of family-owned businesses that have benefited from the 95% exemption described in 1.1 Tax Regimes.
As explained in 1.2 Exemptions, the transfer of family-owned businesses to the next generation may qualify for a 95% IGT and Wealth Tax relief.
To the extent that the autonomous regions regulate their own exemptions, deductions and reductions in respect of both IGT and Wealth Tax (eg, in Madrid, a tax rebate of up to 99% for IGT and up to 100% for Wealth Tax is applicable), the tax residence, as so determined for each tax, in a specific autonomous region within Spain will determine the tax burden on the transfer of assets.
In terms of IGT, the transfer of digital assets does not generally differ from the transfer of other types of assets.
It is nevertheless relevant to mention that, when digital assets are donated, the PIT of the donor shall be determined. In this context, donated digital assets obtained which the donor obtained in the primary market (ie, by means of mining activity) shall be differentiated from those acquired in the secondary market (ie, by means of trading activity either as a professional or as a regular consumer).
Although in Anglo-American law the trust is a characteristic institution that has a close relationship not only with the law of obligations and property but also with family and succession law, the concept of the trust is not recognised in the Spanish legal system.
Indeed, the Spanish legal system does not allow for a double property regime (ie, formal and legal) over any rights or assets, as would be the case in a trust.
Spain is one of the European countries that ignores the concept of the trust, so there is no law that regulates a similar construct. Nor has Spain signed the Hague Convention on the Law Applicable to the Trust and its Recognition, dated 1 July 1985.
Considering this, the position adopted by the Spanish Directorate General for Taxes (GDT) is that the trust is a legal institution not recognised in Spain and therefore its treatment within the framework of the Spanish tax system shall be predicated on the fact that such an institution has not been recognised by the Spanish legal system.
Consequently, for the purposes of the Spanish legal system, the relations between the contributor of assets and rights to a trust (ie, the settlor) and the recipients or beneficiaries of the trust are deemed to be carried out directly between them as if the trust did not exist – ie, for Spanish tax and legal purposes, the general approach to trusts is that the trust is made transparent for all purposes and is understood to be unincorporated.
The only recognition that the GDT has considered giving to the effects derived from the constitution of a trust is limited to those cases where the beneficiary of a trust is also designated as the trustee of said trust, and therefore it may be deemed under Spanish civil law that the beneficiary has acquired the assets contributed to the trust, and that the settlor has conveyed to the beneficiary the right of ownership over the assets contributed to the trust.
If a Spanish tax resident individual serves as a fiduciary to the trust (ie, as trustee), they would not be deemed to be the owner of the assets contributed to the trust in accordance with Spanish civil law, but merely a representative.
If a Spanish tax resident individual is appointed as the beneficiary of a trust, they would not be deemed to be the owner of the assets contributed to the trust.
The beneficiary of a trust could only be deemed the owner of the assets contributed to the trust under Spanish civil law, and therefore also for Spanish tax purposes, if they were also appointed as a trustee. In any event, this approach should be confirmed on a case-by-case basis.
Planning opportunities linked to trusts are very limited from a Spanish legal perspective and, in fact, the unfolding effect of the legal treatment of the trust under the law of the jurisdiction where it is incorporated and regulated and the legal treatment of the trust under Spanish law must be carefully evaluated. It may be the case that assets contributed to a trust are deemed to have been transferred to the beneficiary according to the law of the jurisdiction of the trust, while from a Spanish legal perspective said transaction is deemed to not have occurred.
On the other hand, it may be the case that the settlor carries out a donation or other transaction involving the assets contributed to the trust that produces binding legal effects from a Spanish civil and tax law perspective, but such a transaction may be contrary to the deed of trust or to the general laws of the jurisdiction of the trust.
As trusts are not recognised under the Spanish legal system, there is no specific development in this area.
Although Spanish law establishes measures to protect the assets of minors or disabled individuals, it does not recognise legal institutions that are familiar to common law practitioners and asset protection experts, such as trusts, which extract assets from the economic sphere of an individual in favour of third parties (typically descendants) to protect them from potential liabilities incurred by that individual.
Inheritance and gifts are liable to IGT in Spain, which is levied on goods and rights acquired by Spanish tax residents by inheritance, legacy or other types of succession, or by donation. The tax is levied on the acquisition value of assets, which is equal to the market value. The tax liability will depend on different matters, such as the relation between the taxpayer and the donor or deceased, the taxpayer’s previous wealth, and the autonomous region of residency. The autonomous regions have extensive power to control their own tax reliefs and tax rates, so tax liability can differ significantly from one region to another.
The most popular family business succession planning strategy consists of applying the 95% reduction in the taxable base of succession by descendants or spouses. This requires the company to be exempted under the Net Wealth Tax (NWT) rules, which in turn requires the following:
When a partial interest in an entity is transferred, either during life or upon death, the fair market value of the interest for Spanish Transfer Tax purposes is not adjusted to reflect a discount for lack of marketability and control. All transactions carried out by and between related parties shall be valued at arm's length.
Disputes regarding estates often result from lack of succession planning or from successions involving international parties.
Arbitration and mediation are alternative ways to solve wealth disputes, requiring less time and money than the judicial proceedings of ordinary jurisdictional bodies.
The calculation of damages follows general Spanish civil law rules, essentially aimed at repairing the damages suffered by the parties.
Penalty clauses included in succession planning instruments are very important.
The use of corporate fiduciaries is not prevalent in Spain.
This is not applicable in Spain.
This is not applicable in Spain.
This is not applicable in Spain.
In Spain, tax residence determines tax liability and Spanish PIT sets forth two rules and a presumption to consider an individual as a tax resident in Spain.
Finally, unless there is clear evidence from the taxpayer demonstrating otherwise, the law presumes that an individual will be considered a resident in Spain when their spouse and dependent minor children reside in Spain (presumption applicable).
Tax residence is key to determining the personal liability for direct taxes. Domicile is just an indication of habitual residence.
Spain does not request any visas for EU and EEA jurisdictions, for most Latin American jurisdictions, or for other jurisdictions such as Israel, Singapore, the United States and South Korea, among others. A tourist visa in Spain lasts 90 days from arrival.
In 2013, Spain passed its own Golden Visa programme, which allows qualified investors to reside in Spain for a one-year period renewable for two years and, ultimately, for five years. The following qualified investments in Spain must be carried out in order for the investor to be eligible:
The scope of the Golden Visa includes relatives of the applicant; the spouse and descendants under 18 may apply – jointly, simultaneously or subsequently – for the authorisation and the visa. This scope has been extended to the partner of the applicant and to children of legal age who are economically dependent and unmarried, as well as to the economically dependent ascendants of the applicant.
Certain changes to the Spanish Golden Visa programme are expected to be implemented in the short- to mid-term, as a means of narrowing the cases where it may be applicable. As a matter of reference, Portugal has already started a legislative process in that direction.
The Golden Visa does not permit Spanish citizenship. However, among other channels, the Spanish Civil Code allows individuals to obtain Spanish citizenship if they have ten years of residence in Spain, or two years of residence for citizens of Ibero-American jurisdictions, Andorra, the Philippines, Equatorial Guinea and Portugal, and for individuals with Sephardic ancestors.
In any case, nationality is originally acquired on a ius sanguinis basis (ie, by descendants born to Spanish nationals). However, other factors also enable the acquisition of Spanish nationality, such as residence, affiliation/adoption bonds and discretionary measures (naturalisation card – carta de naturaleza).
Spanish legislation contains a specific regime to protect the net worth of disabled individuals. This regime is intended to foster the consolidation of funds to cover the vital needs of disabled individuals throughout their lives without triggering the regular taxes that would be levied upon the standard contributions made in any other case.
Legal capacity may be revoked by a judge, in which case the custody and protection of the incapacitated person may be guaranteed through the appointment of a guardian, curator or custodian.
The appointment procedure requires a judge to approve the custody, usually involving a hearing with the closest relatives of the person concerned. Once the appointment is made, management must be carried out in the best interest of the incapacitated person. Except for some specific powers that would require a judge’s authorisation, the power of custody shall be exercised by the guardian, curator or custodian.
Spanish legislation has developed the so-called “Dependency Law”, which aims at providing public assistance and financial aid to individuals taking care of relatives who are not self-sufficient and need help in their day-to-day routine.
Spanish legislation applies equally to all biological children, regardless of whether or not they are born to married parents.
Adopted children are treated equally to biological children except for in the case of Spanish peerages, for which being born in wedlock may be a requisite.
The Spanish legal system confers the same legal status on same-sex marriages as opposite-sex marriages. Civil unions are also recognised as a form of a legal union, in terms very similar to marriage.
Although civil unions are equal to marriage in many respects, they have a specific legal status in certain areas such as succession and tax (the possibility to be taxed jointly, alimony, widowhood pensions, etc). These aspects are often regulated by each autonomous region.
Act 49/2002 of 23 December provides for a specific tax regime applicable to foundations, associations of public interest, non-profit-making organisations and philanthropic activities.
This tax regime sets forth a total exemption for contributions and donations received by the relevant foundations, associations and non-profit-making organisations, and also for the income derived by those entities that is strictly connected to their general interest purpose.
Foundations and associations of public interest that derive income that may not qualify as fully exempt are taxed at a 10% rate on said non-exempt income.
These entities are also entitled to certain tax exemptions from local taxes such as Real Estate Tax or Tax on the Increase of Value of Urban Land.
Patronage activities are also entitled to tax benefits under Act 49/2002 of 23 December.
Individuals and legal entities that carry out contributions to these entities are entitled to tax deductions from their respective PIT or CIT, as applicable.
For individuals, tax deductions amount to 80% of the donations up to EUR150 carried out, and 35% of the amounts exceeding this threshold.
If donations to the same entity are carried out in the last two consecutive tax periods and are of an amount equal to or greater than the amount donated in the previous year, the amount exceeding EUR150 will be 40%. In any event, tax deductions may not exceed an amount equivalent to 10% of the total PIT liability of the relevant individual.
Legal entities will be entitled to deduct an amount equivalent to 35% of the donations and contributions carried out, up to a limit of 10% of the CIT base. Amounts exceeding said limit may be applied in the following ten years.
Spanish charitable entities may be organised under different legal forms in Spain, with the most common forms being associations and foundations. Both types of charities pursue a general interest and are based on non-profit-making principles.
These entities are compelled to use the donations and contributions received to fulfil their statutory purpose. There is a very strict regime relating to the beneficiaries of the activities carried out by these entities; representatives (and their relatives) are excluded as beneficiaries and may not receive a salary for their involvement with these entities.
Charitable structures are typically used in Spain by high net worth individuals and large companies that are or wish to be involved in certain activities of general interest (educational grants, maintenance of artistic heritage, etc).