Withholding tax
Advance payments on account of IRPF or corporate tax that the payer must withhold and pay to the Tax Authority before remitting income to the recipient. Withholding on wages: variable per withholding table. On rents: 19%. On professional fees: 15% (7% in the first 2 years of activity). On dividends and interest: 19%. The Tax Agency imposes penalties for failure to withhold.
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Other Tax law terms
Mandatory electronic invoicing system from AEAT requiring invoicing software to guarantee integrity, preservation, traceability and unalterability of billing records.
AEAT procedure to verify compliance with tax obligations. The taxpayer has the right to legal counsel, copies of proceedings and a maximum 18-month timeframe.
Quantity resulting from measuring the taxable event, to which the tax rate is applied to determine the tax liability. Example: in personal income tax, it is the sum of net income minus reductions.
Legal assumption whose occurrence gives rise to the tax obligation. Example: in VAT, delivery of goods or provision of services; in property transfer tax, transfer of real estate.
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