What is IAE?
IAE is levied on entrepreneurial, professional or artistic activities within the national borders.
Who must pay this tax?
IAE must be paid yearly by individuals and legal entities who carry out entrepreneurial, professional or artistic activities and who are not included in any exemption established in article 82 of the Texto Refundido de la Ley Reguladora de las Haciendas locales (Revised Text of the Regulatory Law of Local Revenue Agencies).
When must it be paid?
Where and how must it be paid?
At the collaborating entities listed on the official payment form using one of the following methods of payment:
- In person, at branch offices of the financial institutions.
- ATM, if the collaborating entity offers this service.
- Phone banking, if the collaborating entity offers this service.
- Internet, by bank transfer or using a debit or credit card.
The official payment form sent by BASE via surface mail, is needed to complete the transaction. If you do not receive this form you can request a copy from any of the BASE offices.
Notice: Payment must be made within the period stipulated on the official payment form. After this period you can request a new document, depending on the status of your tax file.
Regulation of IAE
The IAE is regulated by:
- The Texto Refundido de la Ley Reguladora de las Haciendas Locales(Revised text of the Regulatory Law of Local Revenue Agencies), approved in the Royal Legislative Decree 2/2004, of 5 March (articles 78 to 91, 134, additional administrative orders 10 and 12, temporary administrative orders 4, 13 and 17, single final administrative order);
- Law 51/2002, of 27 December, on the reform of Regulatory Law 39/1988, of 28 December, on Local Revenue Agencies (additional administrative orders 3, 4 and 10);
- The Royal Legislative Decree 1175/1990, of 28 September, approving taxation rates and local procedure formalities;
- The Royal Legislative Decree 1259/1991, of 2 August, approving taxation rates and local procedure formalities corresponding to independent cattle farming activities;
- Local council tax byelaws, in which location coefficients and applicable relief is set (within the limits established by law) and concrete matters and formalities for management and collection are determined.
- The Royal Decree 243/1995, of 17 February, giving the norms for management of Business Tax and regulating the delegation of responsibilities for management of tax registers;
- The Royal Decree 1065/2007, of 27 July, approving the General Regulations on procedures and tax management and inspection, and on the development of common norms for taxation procedures;
- Administrative Order HAC/85/2003, of 23 January, determining the circumstances under which accountable persons are required to notify net turnover and approving the official form for notification;
- Administrative Order HAC/2572/2003, of 10 September, approving the official tax form 840, and setting the general conditions and procedures for filing online
FAQs - Frequently asked questions
1. Which administrations are responsible for IAE census management?
Responsibility for census management (registration, activity rating, and fixing quotas) is exclusive to the Inland Revenue Ministry Central Government. However, as these are municipal taxes, the functions corresponding to census management can be delegated to local councils, provincial councils, island and inter-island councils, and other bodies recognised by law and autonomous communities.
2. How is the net turnover of a business determined?
The net turnover of a business is determined in agreement with article 191 of the Texto Refundido de la Ley de Sociedades Anónimas (Revised Text of the Law on Public Companies), approved by Real Decreto Legislativo (Royal Decree) 1564/1989, 22 December (article from previous law).
3. What is the net turnover to take into account?
In the case of organisations subject to corporation tax or non-residents subject to income tax, net turnover is that of the tax year for which the deadline for submission of declarations was in the year before the tax was calculated.
In the case of civil societies and entities referred to in article 35.4 of the Ley General Tributaria (General Tax Law) 58/2003, 17 December, the business turnover is the amount which corresponds to the penultimate year prior to that in which this tax is due. If this tax period lasted less than a natural year, the turnover is calculated for the full year.
Example: Turnover taken as reference for tax year 2009 will be that of 2007, assuming that the economic activity of the company ends on 31 December.
4. How is the net turnover of a business calculated?
To calculate the business turnover, all the economic activities of the taxpayer must be taken into account.
However, when the entity forms part of a group of companies according to article 42 of the Código de Comercio (trade regulations), the business turnover is equivalent to that of all the entities belonging to the group.
5. How is the business turnover for non-residents calculated?
In the case of income tax for non-residents, IAE is payable on the turnover of all establishments permanently located in Spanish territory.
6. When is it considered that an activity has not started?
Some of the reasons for an activity to be considered not to have started are as follows:
- When it has been exercised previously under different ownership, as for example in cases of merger, spin-off or additions of branches of the activity.
- When a new premises is opened for the same activity as exercised in the same or a different municipal area.
- When the business activity code is changed, for example, due to modification of the regulations or exceeding the limits.
- When the type of quota, municipal, provincial o national, is changed.
7. Who should present form 848 for communication of business turnover?
All those who are liable to pay IAE, except those who have declared the business turnover in their corporation tax, non-resident income tax or on form 184.
Form 848 must be presented to the Agencia Tributaria (Tax Agency) between 1 January and 14 February of the tax year in which the figures are applied.
8. What declaration forms should be used?
Declarations for registering, unregistering and variation, in the case of taxpayers exempt from IAE for all their activities, should be on form 036 of the Agencia Tributaria (Inland Revenue), and must be presented at the offices of the State Administration.
If any of the activities are liable for IAE, the declaration should be using form 840 of the Agencia Tributaria, if company census management is not delegated externally, or using the form of the delegated Administration. In the case of the Diputación de Tarragona (Provincial Council of Tarragona), form 016 should be used.