{"id":18987,"date":"2016-12-07T09:19:30","date_gmt":"2016-12-07T08:19:30","guid":{"rendered":"https:\/\/etl-ilia.es\/general\/asesoria-fiscal-impuesto-sobre-actividades-economicas-iae\/"},"modified":"2024-07-26T18:55:15","modified_gmt":"2024-07-26T16:55:15","slug":"tax-advice-tax-economic-activities-iae","status":"publish","type":"post","link":"https:\/\/etl-ilia.es\/en\/tax-advice-blog\/tax-advice-tax-economic-activities-iae\/","title":{"rendered":"Tax advice: Tax on Economic Activities (IAE)"},"content":{"rendered":"

The most crucial thing you should know about the IAE is that not all companies are required to pay the Tax on Economic Activities (IAE)<\/strong>.<\/p>\n

In this article, we tell you who must pay taxes<\/strong> and how to do so because we know how complicated and particular the world of tax models<\/strong> is.<\/p>\n

Who is exempt from paying the IAE?<\/strong><\/h2>\n

All individuals are exempt from paying taxes<\/strong>. They do not have to do so because it is a tax that only taxes companies.<\/p>\n

Companies with a turnover of less than one million euros do not have to pay the IAE since it only taxes businesses with a higher volume.<\/p>\n

There is some trick to avoid paying the Tax on Economic Activities<\/strong>, but you can only use it if you previously made a forecast of your company’s income.<\/p>\n

How do you know if you have exceeded the minimum figure?<\/strong><\/h2>\n

It would help if you calculated it before the end of the year to get ahead. To obtain the exact data and thus know whether or not you must file the tax, you have to do the following:<\/p>\n

    \n
  • Compute the sales of goods and services that are usual in your activity<\/strong>. However, keep in mind that you must not include VAT. You also do not have to add investments to this calculation.<\/li>\n
  • Check that sales returns, rebates and discounts are included in the negative.<\/strong> Forgetting to deduct them can mean that you have to pay tax even if you have only exceeded the minimum by \u20ac100.<\/li>\n<\/ul>\n

    Now that you know whether or not you have to pay the Tax on Economic Activities, we will tell you how to do it if you are obliged to do so.<\/p>\n

    What should you do if you have exceeded the minimum amount required to pay taxes?<\/strong><\/h2>\n

    Well, in this case, it is clear that you will be obliged to meet your tax obligations<\/strong> or you will have severe problems with the Tax Agency.<\/p>\n

    This is exactly what you will have to do to pay the IAE and not incur tax fines from the administration:<\/p>\n

      \n
    • Submit Form 840<\/strong> (check our tax form service if you need help) in December of next year and inform the Treasury of your registration in the IAE, with effect from 2018. This is done because the Tax on Economic Activities is payable from the following year<\/strong> if the minimum turnover is exceeded.<\/li>\n
    • Continue paying the Tax on Economic Activities from 2018 onwards<\/strong>. Once you have started, you must do so annually. Of course, only as long as you exceed one million euros. You can stop paying tax as soon as your turnover falls below that figure.<\/li>\n<\/ul>\n

      There is one case that should be discussed because it is very relevant. It is the case in which your company is part of a business group made up of several companies. In that case, you should take some things into account.<\/p>\n

      What to do if you are part of a business group?<\/strong><\/h2>\n

      In this case, the matter becomes more complicated. To carry out the above calculations, you must consider the turnover of all the companies in the group<\/strong>.<\/p>\n

      You will have to apply the same parameters as for your company. In addition, you must discount the eliminations and returns and the operations carried out between the different companies in the group<\/strong>.<\/p>\n

      How to avoid paying IAE?<\/strong><\/h2>\n

      You cannot avoid it if your company’s turnover exceeds one million euros<\/strong>. You can be sure that, sooner rather than later, you will have to pay the IAE to avoid being penalized by the Treasury.<\/p>\n

      Now, if before closing the year you detect that you will exceed it, a good tip would be to postpone any sale to the following year.<\/p>\n

      It would help if you waited to close the year below one million and then blamed the sale on the following year. It is a trick that will give you a year’s advantage.<\/p>\n

      It is also possible that no matter what you do, you continue to exceed the minimum to pay tax or exceed it months ago. In this case, you must pay the Tax on Economic Activities.<\/p>\n

      Now you already know everything you need to know about the Tax on Economic Activities<\/strong>. Do not wait until the last minute; make a forecast so that nothing catches you off guard.<\/p>\n

      If you need to know more, you can consult our Tax Advice<\/a><\/strong> service.<\/p>\n<\/div><\/div><\/div><\/div><\/div>