Sunday, October 2, 2022

The Spanish company is taxed 7% more for its profits than the European average

As a general rule, although there are always exceptions, companies must undertake a series of payments for their formation and subsequent incorporation as a company. Likewise, their profits are taxed in the form of taxes on their net profits and, in both cases, Spain is above the EU average in costs and taxes paid to the state. With respect to the latter, the Spanish company bears a total tax burden equal to 47% of its net profit before taxes; whereas The European average is 40%. These data are taken from the latest Sepaim Business Growth Report, which compares the state of business in Spain with other European countries based on Doing Business, WB.

In this way, the total tax burden on Spanish companies is doubled as applicable in countries such as Croatia, Denmark and Romania; In addition to being at least 50% more than the spending on Irish and United Kingdom companies. Along with the European average are our peninsular neighbors (40%) and the Netherlands (41%).



The Spanish company is taxed 7% more for its profits than the European average

There are also countries which are burdened with corporate tax. better than us, This is the case for Germany (49%), not far above Spain; from Belgium, with 55% taxes; from Italy, with 59%; or from France (61%). In the case of these countries, this position corresponds to the possession of a strong productive fabric And with companies of a larger unit, since, it must be remembered, 99.8% of Spain’s producing fabric is made up of companies with less than 50 employees who are unable to grow due to the number of constraints. Meanwhile, these countries support the development of their societies, which last longer in activity and have longer life expectancies.

More expensive to make in Spain

For the Spanish businessman, this circumstance is a big blow, which is facing the burden of tax. Lowers your return on investment and takes away incentives (and resources) for trade growth after investing to establish one, which is even higher than in the European Union.

Forming a limited company in Spain not only takes more paperwork and time, but it is also more expensive. The cost of the procedures associated with the formation of a limited liability company in Spain is equal to 3.9% of the income per resident (about 1,000 euros,

Not only is this higher than the average for the European Union (3.1% of per capita income), but it multiplies costs in countries such as Sweden, Romania, Denmark, Ireland, the United Kingdom or France, where they are not higher than 0. . , 7%.

In this case, Belgium (5.3%), Croatia (6.2%), Germany (6.5%) or Italy (13.8%) are above our country, which leads the list of processing costs.

The minimum capital for forming a limited liability company in our country (3,000 Euros), is equal to 11.6% of the average per capita income, This is in contrast to the cases of Portugal, Belgium, Holland, Ireland or the United Kingdom, where no minimum is required.

The community average is equal to 8.1% of the median income.

This minimum capital of 3,000 Euro will be adapted with the new Create and Grow Law, so that will be removed for start-up, The regulatory text, which passed through the Senate on July 8, explains the need to “promote publicity” to eliminate this requirement. Build companies by reducing their costs of incorporation and intends to expand the options of the founding partners regarding the share capital they wish to subscribe to based on their needs and preferences”.

These approaches are consistent with the fact that in most countries There is no minimum capital requirement to form a company Limited liability, such as the United States, Japan, China or Russia.

Differences by CCAA

There are wide differences between different autonomous communities in the number of processes and costs required to form a limited company. This implies additional information costs in addition to distorting the allocation of resources.

Formation of a like limited company may require the completion of between seven and twelve proceduresDepends on the autonomous community where you want to do it.

Thus, the number of days required to complete all these processes is 14 and 30 business days,

The significant difference in the number of procedures required to form a limited liability company among the various autonomies relates not only to the time they require, but also to the costs involved, which range from equivalent to 3.4% to 6.6% of median income (from 900 to over 1,700 euros, respectively).

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