2023-11-13 07:02:02
What is VAT and how is it applied?
VAT is the main indirect tax in our tax system. Its objective is to tax the consumption of goods and the provision of services. For those who are considered entrepreneurs for VAT purposes, in principle, it is a neutral tax since they pass it on and bear it but can deduct it. The consumer, on the other hand, can never deduct it and therefore effectively bears it.
What tax deductions are available for SMEs?
Companies can reduce the tax burden through Corporation Tax deductions for having invested in R&D, for hiring staff with disabilities, for purchasing electric vehicles or for making donations to non-profit entities, for example.
Furthermore, for all entrepreneurs and professionals (SMEs or not), if they acquire goods or receive services subject to VAT and related to their activity, they can deduct it.
How can I reduce my tax burden?
Except for exceptions or special regimes, entrepreneurs and professionals can deduct the VAT they incur in their activity.
Furthermore, in the Corporate Tax, companies that have a turnover of less than one million euros and that have economic activity, from 2023 can qualify for a rate of 23%, two points below the stipulated 25%.
On the other hand, since the end of 2022 the “Startup Law” has been in force for emerging or recently created companies with a technological and innovative base. The legislation establishes rates of 15% for the first years or the deferral of taxes without guarantee, among other advantages.
What should I do if I receive a letter from the tax authority?
“It is usually essential to answer it, although it depends on the type of writing received,” clarifies Carmen Jover. If it is a legal entity, the notification will be electronic and after ten days said notification will be considered delivered. It is for this reason that Jover recommends entering the Tax Agency’s telematic mailbox every ten days. If you are a natural person and if electronic notification has not been requested, we will receive a paper letter that can be answered in person or electronically. If in doubt, you can always go to the Tax Agency offices or a professional for advice.
Do I have to declare subsidies or aid that I have received to the Treasury?
In principle, yes, although there are some benefits that the law considers exempt from taxation, such as the aid that the inhabitants of the island of La Palma received due to the eruption of the volcano. In the strictly business field, there may be specific help to fix the office façade, for example. Carmen Jover recommends analyzing the Companies or Income Law because, although it is normal for taxes, there could be specific cases in which said aid is exempt. She gives as an example special exemptions linked to a business initiative with a social or health interest.
What are the most common tax errors?
Submit the draft of the Income Tax Return without checking it. Carmen Jover warns that if you are a businessman, you must check that your income and expenses are well declared, that is, that the expenses are related to the activities carried out directly. A classic case of error is deducting gasoline or the purchase of a vehicle. In the case of SMEs, Jover recalls that “it will be necessary to justify very well that the expense is related to the activity, with a route book, mileage, etc., and that this fits.” She warns because if it is not deductible and goes through a Treasury investigation, the deducted amount will have to be returned and a penalty that averages 40% of the amount wrongly deducted will have to be paid. If you have any doubts, it is better to seek advice from the Tax Agency or from a registered professional.
Any book or guide to facilitate the organization and management of all these tax procedures?
The president of the Tax Commission of the College of Economists of Catalonia, Carmen Jover, recalls that the Tax Agency publishes very complete and free manuals on the main taxes. They can be consulted for free at
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