Key terms to understand your business
Clear, practical definitions of the most relevant terms in tax, law, strategy and business operations.
152 terms
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Accelerated Depreciation in Spain (Amortización Fiscal Acelerada)
Accelerated depreciation (amortización fiscal acelerada) in Spain allows companies to deduct a higher proportion of an asset's cost in the early years of its useful life for Corporate Tax purposes, reducing taxable income sooner than straight-line accounting depreciation would permit. Spain offers both statutory accelerated tables and specific regimes for SMEs, newly hired personnel, and R&D assets.
Read definition →Annual Accounts (Cuentas Anuales)
Cuentas Anuales are the statutory annual financial statements that all Spanish companies must prepare, approve, and deposit at the Commercial Registry each year. They include the balance sheet, income statement, statement of changes in equity, cash flow statement (for larger companies), and notes.
Read definition →Anti-Money Laundering (AML)
Anti-money laundering (AML) refers to the legal obligations, internal procedures and controls that designated categories of businesses and professionals (obligated entities) must implement to detect, prevent and report transactions that may be connected with money laundering or terrorist financing. In Spain, the primary legal framework is Law 10/2010 of 28 April and its implementing regulations.
Read definition →Arbitration and Mediation in Spain
Spain has a well-developed framework for alternative dispute resolution (ADR). Arbitration is governed by Ley 60/2003 de Arbitraje (based on the UNCITRAL Model Law) and provides a binding, private process with enforceable awards. Mediation in civil and commercial matters is regulated by Ley 5/2012. Spain is a signatory to the New York Convention (1958), enabling international enforcement of Spanish arbitral awards in 170+ countries.
Read definition →Autónomo — Self-Employed in Spain
An autónomo is a self-employed individual in Spain who carries out an economic activity on their own account. Autónomos must register with the AEAT for tax purposes and with Social Security (RETA regime), pay quarterly income tax instalments and VAT returns, and pay monthly Social Security contributions.
Read definition →B2B Electronic Invoicing in Spain
B2B electronic invoicing (facturación electrónica entre empresas) in Spain is the system by which commercial invoices between businesses are created, sent, and received in a structured digital format. Spain is mandating B2B e-invoicing through the Ley Crea y Crece (Law 18/2022), with phased implementation for all businesses required to register with the Verifactu/Tbai system and use interoperable e-invoice formats.
Read definition →Balance Sheet in Spain
The balance sheet (balance de situación) is a statutory financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time. In Spain, it is a mandatory component of the annual accounts (cuentas anuales) prepared under the Plan General Contable (Spanish GAAP) and filed at the Commercial Registry.
Read definition →Beckham Law
The Beckham Law is the colloquial name for Spain's special tax regime for inbound workers (impatriates), regulated in Article 93 of the Personal Income Tax Act. It allows individuals who transfer their tax residence to Spain to pay tax under the Non-Resident Income Tax (IRNR) regime during the year of transfer and the following five years, applying a flat rate of 24% on employment income up to EUR 600,000 per year.
Read definition →Board of Directors in Spain
The board of directors (Consejo de Administración) is the collective management body of a Spanish capital company, responsible for the day-to-day management and strategic direction of the business. It operates under the Ley de Sociedades de Capital and owes fiduciary duties of loyalty and diligence to the company and its shareholders.
Read definition →Branch vs Subsidiary in Spain
Foreign companies entering the Spanish market must choose between establishing a branch (sucursal) — an extension of the foreign company with no separate legal personality — or incorporating a subsidiary (typically a Sociedad Limitada or S.L.) — an independent Spanish legal entity. The choice affects taxation, legal liability, administrative requirements, and exit flexibility.
Read definition →Business Activity Tax in Spain (Impuesto sobre Actividades Económicas — IAE)
The Impuesto sobre Actividades Económicas (IAE) is a local tax levied on the exercise of business, professional, or artistic activities in Spain. It is administered by municipalities (or the national government for companies with national-scope activities) and is payable annually. Most small businesses and individuals are exempt; IAE applies primarily to companies and individuals with net turnover exceeding €1 million.
Read definition →Business Continuity & Disaster Recovery (BCP/DRP)
Business Continuity Planning (BCP) and Disaster Recovery Planning (DRP) are complementary frameworks that enable organisations to continue critical operations and restore systems after disruptive events. BCP addresses the broader organisational response to disruption; DRP focuses specifically on the recovery of IT systems and data. Together, they form the operational resilience backbone required by ISO 22301 and mandated by NIS2 and DORA for regulated entities.
Read definition →Business Judgment Rule (Spain)
The business judgment rule in Spanish law (Article 226 of the Corporate Enterprises Act, LSC) is a safe harbour that protects directors from judicial scrutiny of their business decisions when they have acted in good faith, without personal conflict of interest, with sufficient information, and following an appropriate decision-making procedure. A decision that proves economically harmful does not generate liability if taken within the legitimate scope of managerial discretion.
Read definition →Business Valuation
Business valuation is the process of determining the economic value of a company or business unit. In the context of M&A transactions, investment rounds, tax planning, and dispute resolution in Spain, valuation uses internationally recognised methods including DCF, multiples analysis, and net asset value, adapted to Spanish accounting and market conditions.
Read definition →Capital Increase (Ampliación de Capital)
A capital increase (ampliación de capital) is a corporate act through which a Spanish company raises its registered share capital by issuing new shares or participaciones, either for cash, non-cash contributions, or from reserves. It requires a General Meeting resolution, a notarial deed, and registration at the Commercial Registry.
Read definition →Cash Flow Analysis
Cash flow analysis is the examination of the actual cash generated and consumed by a business over a period, as distinct from accounting profit. In Spanish M&A, financial analysis, and business planning, cash flow is a more reliable indicator of a company's financial health and value than accounting earnings, which can be distorted by accrual accounting and non-cash items.
Read definition →CISO (Chief Information Security Officer)
A Chief Information Security Officer (CISO) is the senior executive responsible for an organisation's information and cyber security strategy, governance, and risk management programme. The CISO aligns security investments with business objectives, oversees incident response, manages security teams, and reports to the board on the organisation's security posture. Many mid-sized companies access CISO-level expertise through the virtual CISO (vCISO) model.
Read definition →Cloud Computing for Enterprises in Spain
Cloud computing delivers computing services — servers, storage, databases, networking, software, analytics, and intelligence — over the internet on a pay-as-you-go basis. For Spanish businesses, cloud adoption is a cornerstone of digital transformation, enabling scalability, cost efficiency, remote working, and access to advanced technologies that were previously only available to large enterprises.
Read definition →CNAE Codes — Spanish Business Activity Classification
CNAE (Clasificación Nacional de Actividades Económicas) is Spain's standard classification system for economic activities, based on the EU's NACE Rev. 2 standard. Every Spanish business must declare its CNAE code when registering with the AEAT and the Social Security. The code identifies the company's principal economic activity and affects tax treatment, statistical reporting, regulatory requirements, and sector benchmarking by the AEAT.
Read definition →Collective Agreement in Spain (Convenio Colectivo)
A convenio colectivo is a collective bargaining agreement negotiated between employer associations and trade unions that regulates working conditions — wages, hours, holidays, and other rights — for all workers in a given sector or company. Collective agreements are legally binding on all employers and workers within their scope, regardless of whether they are union members.
Read definition →Collective Bargaining in Spain
Collective bargaining in Spain is the process by which employers (or employer associations) and trade unions negotiate the terms and conditions of employment that will apply to all workers within the bargaining unit. Governed by Title III of the Estatuto de los Trabajadores, the process produces collective agreements (convenios colectivos) that have statutory force and bind all employers and workers in their scope.
Read definition →Commercial Contracts in Spain
Commercial contracts in Spain are governed principally by the Código de Comercio (Commercial Code, 1885), the Código Civil (Civil Code, 1889), and numerous specific laws. Key principles include freedom of contract, pacta sunt servanda (binding force of contracts), and the duty of good faith. Spain's commercial contract framework is being progressively modernised, including a long-pending reform of the Código de Comercio.
Read definition →Commercial Registry (Registro Mercantil)
The Registro Mercantil is Spain's official public registry where companies, branches of foreign companies, and individual traders register their existence, corporate documents, and annual accounts. Entries in the registry are public, create legal certainty for third parties, and are often required for banking, contracting, and legal proceedings.
Read definition →Company Acquisition (SPA) in Spain
A company acquisition in Spain is the transaction by which one party (the buyer) purchases all or a controlling stake in the shares or assets of a target Spanish company from the existing owner(s) (the seller). The transaction is documented in a Sale and Purchase Agreement (SPA), which sets out the price, conditions, representations and warranties, and post-closing obligations.
Read definition →Company Director Liability in Spain
Directors of Spanish companies can be held personally liable for damages caused to the company, its shareholders, or third parties through acts contrary to law, the articles of association, or their fiduciary duties. Liability can be civil (compensation) or criminal (fines, disqualification, imprisonment) and extends to foreign directors of Spanish companies and subsidiaries.
Read definition →Company Dissolution and Liquidation in Spain
Company dissolution (disolución) is the event that triggers the end of a Spanish company's existence, followed by liquidation (liquidación) — the process of winding down the company's affairs, settling debts, and distributing remaining assets to shareholders. It is governed by the Ley de Sociedades de Capital and requires notarial and registry formalities.
Read definition →Company Secretary (Secretario del Consejo) in Spain
The company secretary (secretario del consejo or secretario no consejero) is an officer responsible for the governance and administrative functioning of the board of directors of a Spanish company. The role includes maintaining corporate records, certifying board resolutions, managing the Commercial Registry relationship, and advising directors on their legal obligations.
Read definition →Corporate Criminal Liability in Spain
Since the 2010 reform of the Spanish Criminal Code, legal entities (companies) can be held directly criminally liable for certain offences committed by their managers or employees in the course of business. Companies can face fines, dissolution, suspension, prohibition from contracting with public bodies, and other criminal sanctions. Implementing a robust criminal compliance programme (compliance penal) is the primary defence.
Read definition →Corporate Governance in Spain
Corporate governance in Spain refers to the system of rules, practices, and processes by which Spanish companies are directed and controlled. It encompasses the relationship between shareholders, the board of directors, management, and other stakeholders, and is regulated by the Ley de Sociedades de Capital, the CNMV's Good Governance Code for listed companies, and sector-specific regulations.
Read definition →Corporate Social Action (Acción Social de Responsabilidad)
The corporate social action (acción social de responsabilidad) is the legal mechanism under Article 238 of Spain's Corporate Enterprises Act (LSC) that allows a company, shareholders representing at least 5% of share capital, or creditors to bring a civil liability claim against directors and officers for damages caused to the company's assets through breach of their legal duties. It is the primary tool for internal director liability in Spanish corporate law.
Read definition →Corporate Spin-Off in Spain
A corporate spin-off (escisión) in Spain is a corporate restructuring operation by which a company transfers part or all of its assets and liabilities to one or more existing or newly incorporated companies, in exchange for shares in those companies being delivered to the shareholders of the transferring entity. It is governed by the Ley de Modificaciones Estructurales and can qualify for full tax neutrality.
Read definition →Corporate Tax (Impuesto de Sociedades)
Corporate Tax (Impuesto de Sociedades, IS) is the annual tax levied on the worldwide profits of companies resident in Spain. The standard rate is 25%, with reduced rates available for newly created companies and certain other entities.
Read definition →CSRD (Corporate Sustainability Reporting Directive)
EU directive requiring large companies and listed SMEs to report on sustainability matters using the European Sustainability Reporting Standards (ESRS), with mandatory limited assurance. It replaces and significantly expands the Non-Financial Reporting Directive (NFRD).
Read definition →Culpable Insolvency (Concurso Culpable)
Culpable insolvency is the classification given to a Spanish insolvency proceeding (concurso de acreedores) when the generation or aggravation of the debtor's insolvency was caused by intentional misconduct or gross negligence of the debtor or its directors (Article 442 of the TRLC). A finding of culpable insolvency may result in directors being personally liable to cover the insolvency deficit from their own assets, disqualification from managing companies, and loss of any claims they hold against the insolvent company.
Read definition →Cybersecurity for Businesses in Spain
Cybersecurity for businesses in Spain encompasses the technical, organisational, and legal measures required to protect information systems, networks, and data from cyberattacks, unauthorised access, and data breaches. It is regulated by NIS2, the GDPR, Spain's ENS (Esquema Nacional de Seguridad), and sector-specific requirements, with enforcement by INCIBE and the AEPD.
Read definition →D&O Insurance (Directors and Officers Liability)
Directors and Officers (D&O) liability insurance is a policy that covers the personal civil liability of company directors and senior officers for claims made against them by shareholders, creditors, employees, regulators, or other third parties arising from acts or omissions in the exercise of their management functions. It covers legal defence costs and any resulting indemnity payment, within policy limits, with standard exclusions for wilful fraud and criminal conduct.
Read definition →Data Protection Impact Assessment (DPIA)
A Data Protection Impact Assessment (DPIA) is a structured risk analysis process required by GDPR Article 35 before undertaking processing likely to result in a high risk to individuals' rights and freedoms. It identifies the nature, scope, context, and purposes of the processing, assesses necessity and proportionality, evaluates risks, and determines measures to address them.
Read definition →Data Protection in Spain — GDPR and LOPDGDD
Data protection in Spain is governed by the EU General Data Protection Regulation (GDPR, Regulation 2016/679) and the Spanish Ley Orgánica 3/2018 de Protección de Datos Personales y garantía de los derechos digitales (LOPDGDD). Spain's supervisory authority is the AEPD (Agencia Española de Protección de Datos). The LOPDGDD adapts and supplements the GDPR for Spain, introducing digital rights in the employment context and extending rules for political parties and credit profiling.
Read definition →Data Protection Officer (DPO)
A Data Protection Officer (DPO) is a designated individual responsible for overseeing an organisation's data protection strategy and ensuring compliance with the GDPR and Spain's LOPD-GDD. The DPO acts as the internal point of contact for data subjects and the AEPD, operates with guaranteed independence, and cannot be penalised for performing their tasks.
Read definition →Debt Discharge / Fresh Start (BEPI)
The debt discharge mechanism (Beneficio de Exoneración del Pasivo Insatisfecho, BEPI) is the Spanish fresh-start mechanism under the Consolidated Insolvency Act (TRLC) that allows natural persons — entrepreneurs, self-employed professionals, and personal guarantors — to have court-ordered cancellation of debts that remain unpaid after an insolvency proceeding or asset liquidation. It embodies the second-chance principle allowing honest but unfortunate debtors to start over free from the burden of unrepayable past debts.
Read definition →Debt Restructuring
Debt restructuring is the process by which a company negotiates with its creditors to modify the terms of its financial obligations (maturity, interest rate, principal, or security) with the aim of restoring economic viability and avoiding insolvency. It can be carried out out-of-court or, if agreement cannot be reached with all creditors, through the pre-insolvency mechanisms provided for in the Spanish Insolvency Act.
Read definition →Digital Nomad Visa Spain (Visa Nómada Digital)
Spain's Digital Nomad Visa (Visa para Teletrabajadores de Carácter Internacional) is a residency permit introduced by the Startup Law (Ley 28/2022) that allows non-EU nationals who work remotely for companies based outside Spain to live and work legally in Spain. Holders benefit from a favourable flat-rate personal income tax of 24% under a modified Ley Beckham regime for up to five years.
Read definition →Digital Transformation for Businesses
Digital transformation is the process by which businesses fundamentally change how they operate and deliver value by integrating digital technologies into all areas of the organisation. In Spain, it is supported by the Kit Digital programme, the National Digital Spain 2026 agenda, and EU recovery funds (PRTR), with significant implications for productivity, competitiveness, and employment.
Read definition →Dismissal Law in Spain — Procedente, Improcedente, Nulo
Spanish dismissal law classifies every termination initiated by the employer as procedente (fair), improcedente (unfair), or nulo (null). The classification determines whether the worker must be reinstated, what severance is payable, and whether the employer bears additional liability. The distinction between fair, unfair, and null dismissal is the central axis of Spanish employment litigation.
Read definition →DORA (Digital Operational Resilience Act)
DORA (Regulation EU 2022/2554) is the EU's regulatory framework requiring financial sector entities to manage and mitigate ICT risk, ensure operational resilience against digital disruptions, and impose contractual standards on their technology providers. It became directly applicable across all EU member states, including Spain, from 17 January 2025.
Read definition →Double Tax Treaty (Convenio de Doble Imposición)
A Double Tax Treaty (CDI) is a bilateral agreement between Spain and another country that determines which state has the right to tax specific categories of cross-border income, and at what rates. Treaties prevent the same income from being taxed twice and provide reduced withholding tax rates on dividends, interest, and royalties.
Read definition →Double Taxation
Double taxation occurs when the same income or asset is subject to equivalent taxes in two different countries during the same tax period — either because both countries treat the taxpayer as a resident (juridical double taxation) or because the same income is taxed in two different hands within the same economic chain (economic double taxation). Spain's network of over 90 Double Tax Treaties (DTTs) is designed to eliminate or reduce this burden.
Read definition →Due Diligence
Due diligence is the structured investigation and analysis of a target company or asset before a transaction — typically a merger, acquisition, or investment. In Spain, it covers legal, tax, financial, and labour aspects and is essential for identifying liabilities, risks, and deal-breakers before signing.
Read definition →Earn-Out Clauses in M&A
An earn-out clause is a contractual mechanism in a sale and purchase agreement (SPA) by which part of the acquisition price is deferred and paid only if the target business achieves defined financial or operational milestones after closing. Earn-outs bridge valuation gaps between buyers and sellers and are common in Spanish SME and technology company acquisitions.
Read definition →EBIT — Earnings Before Interest and Taxes
EBIT (Earnings Before Interest and Taxes) is an operating profitability measure that shows how much profit a business generates from its core operations before the effects of its capital structure (interest payments) and tax obligations. In Spanish financial statements, EBIT is equivalent to the 'resultado de explotación' (operating result) in the income statement.
Read definition →EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) is the most widely used measure of a company's operating profitability in corporate finance and M&A contexts. In Spain, as elsewhere, it serves as the basis for valuation multiples and financial covenant calculations, though its interpretation requires adjustments for Spanish accounting and tax specificities.
Read definition →Electronic Invoicing in Spain (Ley Crea y Crece)
Electronic invoicing (facturación electrónica) in Spain is a system requiring businesses to issue, send, and receive invoices in a structured digital format rather than on paper or as unstructured PDFs. The Ley 18/2022 (Ley Crea y Crece) mandates B2B electronic invoicing for all Spanish businesses, with phased deadlines that began applying from 2024 onwards.
Read definition →Enterprise Risk Management (ERM)
Enterprise Risk Management (ERM) is a structured, organisation-wide process for identifying, assessing, prioritising, and managing all significant risks that could affect an organisation's objectives. Unlike siloed departmental risk management, ERM integrates risk oversight into governance and strategy, giving boards and management a consolidated view of the full risk landscape across strategic, operational, financial, legal, and reputational dimensions.
Read definition →ERE — Collective Redundancy in Spain
An ERE (Expediente de Regulación de Empleo) is a formal collective redundancy procedure under Spanish labour law that allows companies to extinguish or suspend employment contracts of a defined number of workers for economic, technical, organisational, or productive reasons. EREs are subject to a mandatory consultation period with worker representatives and, in suspensions, require SEPE authorisation.
Read definition →ERTE — Temporary Layoff in Spain
An ERTE (Expediente de Regulación de Empleo Temporal) is a Spanish labour law mechanism that allows companies to temporarily suspend employment contracts or reduce working hours for economic, technical, organisational, productive, or force majeure reasons. During an ERTE, workers receive unemployment benefits from SEPE instead of their salary, and employer Social Security contributions are partially or fully exempt.
Read definition →ESG and Sustainability Reporting
ESG (Environmental, Social, and Governance) refers to the three dimensions of sustainability used to evaluate a company's non-financial performance and its impact on society and the environment. In Spain and the EU, ESG reporting is increasingly mandatory under the Corporate Sustainability Reporting Directive (CSRD), with significant implications for large companies and their supply chains.
Read definition →ETVE — Spanish Holding Company Regime (Entidades de Tenencia de Valores Extranjeros)
The ETVE (Entidad de Tenencia de Valores Extranjeros) is Spain's special holding company regime that allows Spanish companies to receive dividends and capital gains from foreign subsidiaries largely free of Spanish Corporate Tax, and to distribute those amounts to non-resident shareholders without Spanish withholding tax. It is one of the most competitive holding regimes in Europe for multinational structures.
Read definition →EU AI Act
The EU Artificial Intelligence Act (Regulation EU 2024/1689) is the world's first comprehensive legal framework for artificial intelligence. It classifies AI systems by risk level, imposes obligations on developers, deployers, and importers, and establishes penalties of up to €35 million or 7% of global turnover for the most serious violations. It entered into force in August 2024 with phased compliance deadlines through 2027.
Read definition →EU Parent-Subsidiary Directive in Spain
The EU Parent-Subsidiary Directive (Council Directive 2011/96/EU) eliminates double taxation on profit distributions between EU parent and subsidiary companies by exempting dividends from withholding tax at source and allowing the recipient member state to exempt or credit the distributed profits. Spain has transposed the Directive into its Corporate Tax Law, providing a withholding tax exemption for dividends paid to qualifying EU parent companies.
Read definition →Family Business
A family business is one in which one or more families hold a controlling ownership stake and exercise significant influence over its management or governance. In Spain, family businesses represent more than 85% of the business fabric and are characterised by the intertwining of family and corporate relationships, requiring specialised planning in the areas of succession, governance, and financing.
Read definition →Family Protocol (Protocolo Familiar)
A family protocol is a governance document that regulates the relationship between a family business's owning family and the company, establishing criteria for access to management, decision-making mechanisms, rules for the transfer of shareholdings, and procedures for resolving disputes between family shareholders. It is not a mandatory corporate contract, but when formalised in a shareholder agreement it has full legal effect between the signatories.
Read definition →Financial Leverage
Financial leverage (apalancamiento financiero) refers to the use of debt financing to amplify the potential return on equity investment. In Spain, leverage is measured through debt-to-equity ratios, net debt/EBITDA multiples, and interest coverage ratios. While leverage can increase returns for shareholders, it also magnifies losses and creates insolvency risk if cash flows deteriorate.
Read definition →Foreign Investment in Spain
Foreign direct investment (FDI) in Spain refers to capital, technology, or productive resources contributed by a non-resident investor with the aim of establishing or acquiring a stable business presence in the country. It covers both the formation of new companies and the acquisition of stakes in existing ones, and is subject to a declaration regime and, in strategic sectors, prior authorisation.
Read definition →Formal Tax Obligations in Spain
Formal tax obligations (obligaciones tributarias formales) are the administrative duties that Spanish taxpayers must fulfil beyond simply paying their taxes. They include registering with the AEAT, maintaining accounting and invoice records, filing periodic informative declarations, and cooperating with AEAT verification requests. Failure to meet formal obligations attracts penalties even where no tax is underpaid.
Read definition →Fresh Start Law in Spain (Segunda Oportunidad)
Spain's fresh start law (ley de segunda oportunidad), established by Ley 25/2015 and overhauled by Ley 16/2022, allows individuals and self-employed workers who are over-indebted to obtain a discharge of unsatisfied debts after an insolvency process, enabling a genuine economic fresh start. The mechanism is known as BEPI (Beneficio de Exoneración del Pasivo Insatisfecho).
Read definition →GDPR in Spain (LOPD-GDD)
Spain implements the EU General Data Protection Regulation (GDPR) through the Ley Orgánica de Protección de Datos y Garantía de Derechos Digitales (LOPD-GDD). The supervisory authority is the Agencia Española de Protección de Datos (AEPD), one of the EU's most active data protection regulators.
Read definition →Golden Visa Spain
Spain's Golden Visa was a residency-by-investment permit that allowed non-EU citizens to obtain Spanish residency in exchange for a significant investment in real estate, public debt, shares, or other assets. The programme was abolished by the Real Estate Market Efficiency Measures Act, which came into force in April 2025. No new applications are accepted under this programme.
Read definition →Goodwill in Spanish M&A
Goodwill (fondo de comercio) is the premium paid in an acquisition above the fair value of the net identifiable assets of the acquired business. It represents intangible value — brand reputation, customer relationships, assembled workforce, and synergies. Under Spanish GAAP, goodwill is amortised over its useful life, in contrast to IFRS, which requires annual impairment testing.
Read definition →Income Tax — IRPF (Impuesto sobre la Renta de las Personas Físicas)
IRPF is the Spanish personal income tax levied on the worldwide income of individuals who are tax resident in Spain. It is a progressive tax with rates ranging from 19% to 47% at the national level, with additional regional surcharges applied on top.
Read definition →Independent Director (Consejero Independiente)
An independent director is a board member who has not maintained, and has not maintained in the past three years, business, employment, family or other relationships with the company or its significant shareholders that could compromise their objectivity. Spain's CNMV Corporate Governance Code recommends that independent directors represent at least half of the board in listed companies, and that the chair of the audit committee always be an independent director.
Read definition →Insolvency Administrator (Administrador Concursal)
The insolvency administrator (administrador concursal) is the court-appointed professional who supervises and, in the liquidation phase, manages a Spanish insolvency proceeding. Regulated under the Consolidated Insolvency Act (TRLC), the administrator may be a lawyer, economist, auditor, or specialised legal entity. Core functions include preparing the insolvency report (determining asset and creditor lists), supervising the debtor's disposal acts, and managing the estate in liquidation.
Read definition →Insolvency Proceedings (Concurso de Acreedores)
Concurso de Acreedores is Spain's main insolvency procedure for companies and individuals unable to meet their financial obligations. It can result in a creditor agreement (convenio) that restructures debt or, if no agreement is reached, in the liquidation of the debtor's assets. It is governed by the Ley Concursal and overseen by a specialist commercial court judge.
Read definition →Integrated Compliance
An approach to regulatory compliance management that unifies obligations from multiple regulations (GDPR, AML, criminal compliance, NIS2, whistleblowing, employment equality) into a single coherent framework, eliminating duplication and providing a holistic view of regulatory risk.
Read definition →Intellectual Property in Spain
Intellectual property (propiedad intelectual) in Spain encompasses copyright (automatically arising on creation), related rights, patents, trademarks, industrial designs, utility models, and geographical indications. Spain is a signatory to major international conventions (Berne, Paris, TRIPS, PCT, Madrid Protocol) and applies EU-wide IP frameworks. Registration is required for industrial property rights but not for copyright.
Read definition →International Expansion from Spain
International expansion from Spain refers to the process by which Spanish companies — or foreign companies using Spain as a hub — establish operations, acquire businesses, or develop commercial presence in foreign markets. Spain's geographic position, extensive treaty network, cultural ties with Latin America, and EU membership make it a natural base for businesses expanding into Latin America, North Africa, and other European markets.
Read definition →IRPF Withholding Tax in Spain
IRPF withholding (retencion de IRPF) is the mechanism by which certain payers — companies, self-employed individuals, entities — are required to deduct a percentage of amounts paid to a recipient and remit it to the Tax Agency as an advance payment of the recipient's Personal Income Tax (IRPF). It applies to employment income, professional fees, dividends, interest, rental income, and capital gains, and acts as a system of advance tax collection.
Read definition →ISO 27001 (Information Security Management System)
ISO/IEC 27001 is the internationally recognised standard for Information Security Management Systems (ISMS). It provides a framework of requirements, controls, and best practices enabling organisations to systematically protect the confidentiality, integrity, and availability of information assets, and to achieve independent certification demonstrating that protection to clients, regulators, and partners.
Read definition →Limited Tax Review Procedure (Comprobación Limitada)
A comprobación limitada is a restricted form of AEAT tax verification procedure that focuses on specific data items in a taxpayer's return, using only the information available to the AEAT from its own databases and documents voluntarily provided by the taxpayer. Unlike a full inspection (inspección), it cannot involve on-site visits, examination of private accounting records, or demands for confidential third-party information.
Read definition →Liquidity and Solvency Ratios
Liquidity ratios measure a company's ability to meet its short-term obligations using its current assets. Solvency ratios measure the long-term financial stability and ability to service debt. Both are derived from the balance sheet and are used by banks, investors, and auditors to assess the financial health of Spanish companies.
Read definition →Mandatory Equality Plan for Companies in Spain
Spanish companies with 50 or more employees are legally required to adopt and implement an equality plan (plan de igualdad) — a structured set of measures negotiated with worker representatives to achieve equal treatment and opportunities between women and men. The plan must be registered with the Ministry of Labour and reviewed periodically. Non-compliance is a labour infraction subject to significant fines.
Read definition →Merger by Absorption
A merger by absorption (fusion por absorcion) is a corporate restructuring transaction in which one company (the absorbed company) is dissolved without liquidation and its entire assets, rights, and liabilities are assumed by an existing company (the absorbing company). It is the most common form of merger in Spain, regulated by the Law on Structural Modifications of Commercial Companies.
Read definition →Mergers & Acquisitions (M&A)
Mergers and Acquisitions (M&A) refers to corporate transactions in which companies are combined (merger) or one company acquires another (acquisition). In Spain, M&A transactions follow a structured process governed by corporate, tax, competition, and sector-specific regulatory laws, with the CNMV overseeing transactions involving listed companies.
Read definition →Microenterprise (Spanish Insolvency Law)
Under Spain's Consolidated Insolvency Act (TRLC), a microenterprise is any natural or legal person carrying on business or professional activity with fewer than 10 employees and total liabilities not exceeding EUR 700,000 at the time of filing. Microenterprises have access to a simplified special insolvency procedure — faster, cheaper, and less complex than the ordinary concurso de acreedores — introduced by Act 16/2022 to make restructuring and fresh-start mechanisms accessible to the smallest businesses.
Read definition →Minimum Wage in Spain (SMI)
The Salario Mínimo Interprofesional (SMI) is Spain's statutory national minimum wage, set annually by the government after consultation with trade unions and employer associations. It applies to all workers in Spain regardless of sector, age, or contract type (with narrow exceptions), and serves as the floor for both pay and Social Security contribution bases.
Read definition →Modelo 200 (Annual Corporate Tax Return)
Modelo 200 is the annual self-assessment return used by Spanish companies and non-resident entities with a permanent establishment to declare and settle Corporate Tax (Impuesto de Sociedades). It reconciles accounting profit with the taxable base and calculates the final tax liability for the year.
Read definition →Modelo 232 — Related-Party Transaction Disclosure
Modelo 232 is an annual informative declaration filed with the AEAT that discloses transactions between related parties (operaciones vinculadas) and transactions with entities in tax havens. It is distinct from the transfer-pricing documentation obligation and focuses specifically on the reporting of the transactions themselves, their amounts, and the nature of the relationship.
Read definition →Modelo 303 (Quarterly VAT Return)
Modelo 303 is the Spanish quarterly (or monthly) VAT self-assessment return filed by businesses to declare output VAT charged on sales, input VAT recoverable on purchases, and pay or claim the net difference. It is the central compliance document for VAT in Spain.
Read definition →Modelo 720 (Foreign Asset Declaration)
Modelo 720 is an informative tax declaration that Spanish tax residents must file when they hold assets or rights located abroad — including bank accounts, securities, and real estate — whose aggregate value in each category exceeds EUR 50,000. It is filed annually, and failure to declare can trigger significant penalties.
Read definition →Net Debt
Net debt (deuda neta) is the total financial debt of a company (bank loans, bonds, finance leases, and similar obligations) minus cash and cash equivalents. It is the central bridge between Enterprise Value and Equity Value in M&A transactions and is a key measure of a company's leverage and financial risk.
Read definition →NIE Number (Número de Identificación de Extranjero)
The NIE (Número de Identificación de Extranjero) is the tax and legal identification number assigned to all foreign nationals in Spain. It is required for virtually every significant legal and financial transaction in Spain — buying property, incorporating a company, opening a bank account, signing a work contract, or filing taxes.
Read definition →NIF and NIE Numbers in Spain
The NIF (Numero de Identificacion Fiscal) is the tax identification number assigned to Spanish individuals and legal entities by the Tax Agency. The NIE (Numero de Identidad de Extranjero) is the identification number assigned to foreign nationals in Spain for dealings with public authorities, financial institutions, and legal transactions. Both are essential for operating economically and legally in Spain.
Read definition →NIS2 Directive
The Network and Information Security Directive 2 (NIS2 — Directive 2022/2555/EU) is the EU's updated cybersecurity framework, replacing the original NIS Directive of 2016. It significantly expands the scope of mandatory cybersecurity obligations to cover more sectors and entity types across all member states, with Spain in the process of transposing it into national law.
Read definition →Non-Resident Income Tax (IRNR — Impuesto sobre la Renta de No Residentes)
IRNR is the Spanish tax on income obtained in Spain by individuals and entities that are not tax resident in Spain. It applies to rental income from Spanish property, dividends from Spanish companies, capital gains on Spanish assets, and other Spain-source income.
Read definition →Occupational Risk Prevention in Spain (PRL)
Prevención de Riesgos Laborales (PRL) is Spain's occupational health and safety framework, governed by Ley 31/1995. Employers are obligated to evaluate workplace risks, implement prevention measures, provide information and training, conduct health surveillance, and document all prevention activities. Non-compliance exposes employers to fines, loss of public subsidies, and criminal liability in cases of serious accident.
Read definition →OSS and IOSS — VAT One-Stop Shop for E-Commerce in Spain
The OSS (One-Stop Shop) and IOSS (Import One-Stop Shop) are EU VAT simplification schemes that allow businesses selling goods and digital services to consumers across multiple EU member states to register for VAT once — in a single EU country — and declare and pay all cross-border B2C VAT through that single registration, rather than registering separately in each country where they have customers.
Read definition →Patent Box Regime (Spain)
Tax incentive under Article 23 of the Spanish Corporate Tax Act (LIS) that provides a 60% reduction on income derived from the licensing or transfer of qualifying intangible assets such as patents, utility models, and registered software, effectively reducing the tax rate on IP income to 10%.
Read definition →Payroll in Spain (Nómina)
Payroll processing in Spain (gestión de nóminas) encompasses calculating employee salaries, applying statutory deductions for Social Security contributions and IRPF income tax withholdings, issuing payslips (nóminas), and making payment and filing obligations to Social Security and the AEAT. Spain's payroll rules are complex and strictly enforced.
Read definition →Permanent Employment Contract in Spain
A permanent employment contract (contrato indefinido) is the standard and legally presumed form of employment relationship in Spain. Since the 2021 labour reform, Spanish labour law strongly favours permanent contracts over temporary ones, and the use of temporary contracts has been significantly restricted. Permanent contracts provide maximum job security and are the default hiring mode.
Read definition →Permanent Establishment in Spain (Establecimiento Permanente)
A permanent establishment (establecimiento permanente, EP) is a fixed place of business or dependent agent through which a foreign company carries on business in Spain, thereby becoming subject to Spanish Corporate Tax on the profits attributable to that establishment. The concept is central to Spain's international tax framework and determines when a foreign company's Spanish activities cross the threshold from mere trading into a taxable presence.
Read definition →Phishing and Social Engineering
Phishing is a cyberattack technique that deceives individuals into revealing sensitive information (credentials, payment details) or taking harmful actions (transferring funds, installing malware) by impersonating trusted entities via email, phone, or messaging. Social engineering is the broader category of psychological manipulation techniques that underpin phishing and other human-factor cyberattacks.
Read definition →Plusvalia Municipal (Spanish Municipal Capital Gains Tax)
The plusvalia municipal is the colloquial name for Spain's Tax on the Increase in Value of Urban Land (IIVTNU), a local tax that levies the increase in value of urban land between the date of acquisition and the date of transfer. It is triggered on the sale, gift, or inheritance of urban property and is administered by the municipality where the land is located.
Read definition →Power of Attorney (Poder Notarial)
A Poder Notarial is a notarised power of attorney executed before a Spanish notary, authorising a named representative to act on behalf of another person or company in legal, tax, property, or commercial matters. For foreign documents, an apostille is typically required for recognition in Spain.
Read definition →Privacy by Design
A GDPR principle (Article 25) requiring data protection to be integrated into the design of products, services, systems, and processes from the outset, rather than retrofitted after development. It includes privacy by default, which mandates that the most privacy-protective settings apply without user intervention.
Read definition →Professional Company in Spain (Sociedad Profesional)
A professional company (sociedad profesional) is a specific type of Spanish corporate entity regulated by Ley 2/2007 that allows licensed professionals — lawyers, architects, doctors, engineers, accountants, and others — to practise their profession through a company rather than as individual self-employed practitioners. The company itself holds the professional licence and contracts directly with clients, while the individual professionals are shareholders and employees.
Read definition →Profit and Loss Account in Spain
The profit and loss account (cuenta de pérdidas y ganancias) is the income statement of a Spanish company, showing revenues, costs, and the net profit or loss for a financial year. It is a mandatory component of the annual accounts under the Plan General Contable and follows a standardised format prescribed by Spanish accounting regulations.
Read definition →Property Transfer Tax in Spain (Impuesto sobre Transmisiones Patrimoniales — ITP)
Property Transfer Tax (Impuesto sobre Transmisiones Patrimoniales, ITP) is a regional tax levied on the transfer of second-hand real estate and other patrimonial assets between private parties in Spain. It is administered and collected by each Autonomous Community, with rates typically ranging from 6% to 11% of the purchase price. ITP and VAT are mutually exclusive: new properties are subject to VAT, while resale properties are generally subject to ITP.
Read definition →Public Deed (Escritura Pública)
An Escritura Pública is a formal legal document executed before a Spanish notary that gives legal certainty and public faith to the act it records. Many key transactions in Spain — company incorporation, property purchase, capital increases, mortgage execution — are legally required to take place by means of a public deed.
Read definition →Public Procurement in Spain
Public procurement in Spain is regulated by Ley 9/2017 de Contratos del Sector Público (LCSP), which transposes EU Directives 2014/24 and 2014/25. The LCSP governs how public entities purchase goods, services, and works, establishing binding procedures, transparency obligations, and bid exclusion criteria. Foreign companies can tender for Spanish public contracts subject to EU and WTO procurement rules.
Read definition →R&D Tax Deduction in Spain
Spain offers one of Europe's most generous R&D and technological innovation (I+D+i) tax credit regimes, providing direct deductions from Corporate Tax liability of between 12% and 42% on qualifying expenditure. Companies can apply these credits immediately or carry them forward, and in certain cases receive a cash refund from the AEAT.
Read definition →Ransomware & Cyber Threats
A type of malicious software that encrypts an organisation's files or systems and demands a ransom payment to restore access. It is the most financially damaging cyber threat facing businesses, with average incident costs exceeding EUR 4 million in 2025.
Read definition →Related-Party Transactions in Spain
Related-party transactions (operaciones vinculadas) are transactions between a company and its shareholders, directors, group companies, or other connected persons. In Spain, they are subject to specific tax rules requiring arm's-length pricing, disclosure obligations, and transfer pricing documentation, and to corporate governance controls designed to prevent conflicts of interest.
Read definition →Remote Work Law in Spain (Ley 10/2021)
Ley 10/2021 de 9 de julio, on remote work (trabajo a distancia), establishes a comprehensive legal framework for telework in Spain. Companies where 30% or more of the working day is performed remotely over any 3-month reference period must formalise a written remote work agreement with each affected employee, detailing working conditions, equipment, expense reimbursement, and the right to disconnect.
Read definition →Risk Prevention Plan (Plan de Prevención de Riesgos Laborales)
A Plan de Prevención de Riesgos Laborales is the mandatory workplace health and safety management plan required by Spanish law for all employers. It documents risk assessments, prevention measures, emergency procedures, and employee training obligations. The Spanish Labour Inspectorate (ITSS) enforces compliance with severe penalties for non-compliance.
Read definition →ROI, ROA and ROE Explained
ROI (Return on Investment), ROA (Return on Assets), and ROE (Return on Equity) are three key profitability ratios used to evaluate how efficiently a business generates returns from its invested resources. In Spain, they are used in investment analysis, M&A due diligence, business valuations, and management performance assessments.
Read definition →RPA (Robotic Process Automation)
Technology that uses software robots (bots) to automate repetitive, rule-based business tasks such as data entry, invoice processing, and report generation. RPA reduces manual effort, improves accuracy, and frees employees for higher-value work.
Read definition →Severance Pay and Final Settlement in Spain (Finiquito)
Severance pay (indemnización) in Spain is a statutory lump sum payable to workers on dismissal or on specific contract terminations, calculated on the basis of salary and years of service. The finiquito is the final settlement document listing all amounts owed to the departing worker: outstanding salary, pro-rated extras, holiday pay, and any applicable severance.
Read definition →Share Capital Increases and Reductions in Spain
Share capital increases (ampliación de capital) and reductions (reducción de capital) are formal corporate operations that change the registered share capital of a Spanish company. They require shareholders' meeting approval, notarial documentation, and registration at the Commercial Registry. Capital increases can finance growth or admit new investors; capital reductions can return excess capital to shareholders or absorb losses.
Read definition →Shareholders' Agreement (Pacto de Socios)
A Pacto de Socios is a private contract between the shareholders of a Spanish company that supplements the articles of association. It governs shareholder rights and obligations — voting, share transfers, tag-along and drag-along rights, dividend policy, and exit mechanisms — and is essential for multi-shareholder companies and investment rounds.
Read definition →Shareholders' Meeting (Junta General)
The Junta General de Socios (in a Sociedad Limitada) or Junta General de Accionistas (in a Sociedad Anónima) is the supreme governing body of a Spanish company, bringing together all shareholders to exercise collective decision-making rights on matters reserved by law or the articles of association. It must meet at least once a year to approve the annual accounts.
Read definition →Sick Leave in Spain (Incapacidad Temporal)
Incapacidad temporal (IT) is Spain's statutory sick leave system, providing income replacement for workers who are temporarily unable to work due to illness or accident. The first 15 days are paid by the employer; from day 16, the INSS or a mutual insurance society (mutua) pays a daily benefit. The worker must obtain and renew medical certificates from their GP or specialist.
Read definition →SII — Immediate Information Supply System (Suministro Inmediato de Información)
The SII (Suministro Inmediato de Información) is Spain's real-time VAT reporting system, operated by the AEAT. Businesses within its scope must upload the details of each invoice issued or received to the AEAT's electronic portal within four days of the transaction date, replacing the traditional annual and quarterly VAT ledger declarations with a continuously maintained digital ledger.
Read definition →Simplified VAT Regime in Spain (Régimen Simplificado del IVA)
The Simplified VAT Regime (Régimen Simplificado del IVA) is an optional VAT calculation method available to small businesses and self-employed individuals (autónomos) in certain sectors. Instead of tracking actual VAT charged and incurred on each transaction, the taxpayer pays a fixed VAT amount determined by objective indices (módulos) such as employees, surface area, and electricity consumption.
Read definition →Social Security Contributions in Spain
Social Security contributions (cotizaciones a la Seguridad Social) are mandatory monthly payments made by both employers and employees to the TGSS (Tesorería General de la Seguridad Social). They fund Spain's pension system, unemployment benefits, healthcare, sickness leave, maternity and paternity leave, and workplace accident insurance. Employer contributions represent approximately 30.5% of an employee's gross salary.
Read definition →Social Security in Spain (Seguridad Social)
Spain's Social Security system (Seguridad Social) is the public insurance system providing healthcare, unemployment benefits, pensions, work accident coverage, and other social protections. Employers and employees both contribute monthly based on the employee's gross salary, and contributions are mandatory from the first day of employment.
Read definition →Sociedad Anónima (SA) — Spanish Corporation
A Sociedad Anónima (SA) is Spain's corporation structure for larger companies, where capital is divided into freely transferable shares (acciones). It requires a minimum share capital of EUR 60,000 and is the mandatory form for companies that wish to list on a Spanish stock exchange.
Read definition →Sociedad Limitada (SL) — Spanish Limited Liability Company
A Sociedad Limitada (SL) is Spain's most common corporate structure, equivalent to a UK Limited Company, a US LLC, or a German GmbH. Partners' liability is limited to their capital contributions, and shares (participaciones) are not freely transferable without shareholder approval.
Read definition →Spanish GAAP — Plan General Contable
Spanish GAAP (Generally Accepted Accounting Principles) is the national accounting framework established by the Plan General Contable (PGC), the royal decree that sets mandatory accounting standards for Spanish companies. The PGC was substantially reformed in 2007 to align with IFRS principles and was most recently updated in 2016. It governs the preparation of individual company accounts for non-listed Spanish companies.
Read definition →Spanish General Accounting Plan (PGC)
The Spanish General Accounting Plan (Plan General de Contabilidad, PGC) is the mandatory accounting framework for Spanish companies, approved by Royal Decree 1514/2007. It governs how companies must recognise, measure and present their financial information in annual accounts. A simplified version (PGCE) exists for small and medium-sized enterprises. The PGC is aligned with EU-adopted International Financial Reporting Standards (IFRS) and overseen by the ICAC (Instituto de Contabilidad y Auditoría de Cuentas).
Read definition →Spanish Inheritance & Gift Tax (ISD)
Tax levied on acquisitions of assets by inheritance, bequest, or gift, as well as life insurance proceeds. It is a devolved tax in Spain, meaning each autonomous community sets its own rates, allowances, and reliefs — creating significant regional disparities.
Read definition →Spanish Wealth Tax & Solidarity Tax
Annual tax on the net wealth of individuals in Spain, covering all assets and rights minus liabilities. Since 2022, complemented by the Temporary Solidarity Tax on Large Fortunes (ITSGF), which establishes a minimum effective wealth tax for net assets exceeding EUR 3 million.
Read definition →Special Tax Regimes in Spain
A special tax regime is a set of tax rules applicable to specific territories, sectors, or types of taxpayer that establish reduced tax rates, allowances, or exemptions compared to the general regime. In Spain, the most significant are the Canary Islands Economic and Fiscal Regime (REF), the Canary Islands Special Zone (ZEC), and the tax incentives available in Ceuta and Melilla, which offer substantial advantages for companies establishing real economic activity in those territories.
Read definition →Special VAT Regimes in Spain (RECC and REAGP)
Spain operates several special VAT regimes for specific sectors and taxpayer types. The two most significant are RECC (Régimen Especial del Criterio de Caja — cash basis VAT) and REAGP (Régimen Especial de la Agricultura, Ganadería y Pesca — agriculture, livestock, and fishing). These regimes modify the standard accrual-basis VAT rules to reflect the economic reality of specific sectors.
Read definition →Standard Contractual Clauses (SCCs)
Model contracts adopted by the European Commission that provide adequate safeguards for transferring personal data from the European Economic Area (EEA) to countries without an adequacy decision, in compliance with GDPR requirements.
Read definition →Statutory Audit (Auditoría de Cuentas)
A statutory audit (auditoría de cuentas) in Spain is a mandatory independent examination of a company's annual accounts by a registered auditor (ROAC). It is required when a company exceeds two of three size thresholds, or when shareholders or courts order it. The audit opinion provides assurance to third parties on the reliability of the financial statements.
Read definition →Tax Consolidation (Group Taxation Regime)
Tax consolidation in Spain allows a group of companies under common control to file a single Corporate Tax return, offsetting profits in some entities against losses in others and eliminating intra-group transactions from the taxable base. The regime is governed by Chapter VI of the Corporate Tax Law (Ley 27/2014).
Read definition →Tax Haven (Paraíso Fiscal)
A tax haven (paraíso fiscal in Spanish) is a jurisdiction that Spain formally classifies as offering preferential tax regimes, low transparency, or inadequate exchange of information standards. Transactions and structures involving listed jurisdictions attract specific anti-avoidance rules and higher withholding tax rates under Spanish law.
Read definition →Tax Inspection in Spain (Inspección Tributaria)
A tax inspection (inspección tributaria) in Spain is a formal investigation conducted by the Agencia Tributaria (AEAT) to verify that a taxpayer's declarations are complete and accurate. Inspections can cover Corporate Tax, VAT, IRPF, and other taxes for any open tax year, and may result in additional tax assessments, interest charges, and penalties.
Read definition →Tax Loss Carryforward in Spain (Bases Imponibles Negativas — BINs)
Tax loss carryforwards — known in Spain as Bases Imponibles Negativas (BINs) — allow a company to use losses generated in one tax year to reduce taxable profits in future years, thereby reducing its Corporate Tax liability. Spain permits BINs to be carried forward indefinitely, but their annual application is limited to a percentage of the taxable base depending on the company's turnover.
Read definition →Tax Payment Deferral in Spain (Aplazamiento y Fraccionamiento)
Spanish tax law allows taxpayers who face financial difficulties to request a deferral (aplazamiento) or instalment plan (fraccionamiento) for most tax debts owed to the AEAT. Approved deferrals postpone the payment deadline, with interest accruing at the legal rate, and can apply to both self-assessed taxes and AEAT-issued assessments.
Read definition →Tax Penalties and Sanctions in Spain
The Spanish tax system imposes a tiered regime of penalties (sanciones tributarias) for tax violations, ranging from minor infractions (infracciones leves) to very serious offences (infracciones muy graves). Penalties are calculated as a percentage of the unpaid tax or the incorrectly declared amount, and may be reduced through voluntary cooperation, early payment, and agreement with the AEAT.
Read definition →Tax Representative for Non-Residents in Spain (Representante Fiscal)
A tax representative (representante fiscal) is a Spanish-resident individual or entity appointed by a non-resident company or individual to act on their behalf before the Spanish Tax Agency (AEAT) for tax purposes. In certain cases, Spanish law makes the appointment of a tax representative mandatory, particularly for non-EU residents and non-residents with significant taxable activity in Spain.
Read definition →Tax Residency in Spain
Tax residency in Spain determines whether an individual or company is subject to Spanish taxes on worldwide income and assets or only on Spanish-source income. For individuals, residence is established primarily by spending more than 183 days per year in Spain or having the main nucleus of economic interests located there. Companies are tax-resident if incorporated under Spanish law, have their registered office in Spain, or have their effective management centre in Spain.
Read definition →Temporary and Fixed-Discontinuous Contracts in Spain
After the 2021 labour reform, Spain radically restricted temporary contracting. Only two legitimate temporary contracts remain for most purposes: the contract for a specific work or service (obra o servicio, eliminated in most forms) has been replaced by the substitution contract and the production circumstances contract. Fixed-discontinuous contracts are now the standard vehicle for seasonal and recurring work needs.
Read definition →Trademark Registration in Spain — OEPM and EUIPO
Trademark protection in Spain is obtained through registration with the OEPM (Oficina Española de Patentes y Marcas) for national Spanish marks, or with the EUIPO (European Union Intellectual Property Office) for EU trade marks covering all 27 EU member states. Registered trademarks provide exclusive rights for 10 years, renewable indefinitely, and are enforceable against infringers and counterfeiters.
Read definition →Transfer Pricing
Transfer prices are the prices set in transactions between related parties — companies within the same group, shareholders and their company, or directors and their company — which must be determined in accordance with the arm's length principle. Spanish tax law, aligned with OECD Guidelines, requires that these transactions be valued as if they had been carried out between independent parties and that the valuation method used be adequately documented.
Read definition →Transfer Pricing
Transfer pricing refers to the prices set for transactions between related parties — such as a Spanish subsidiary and its foreign parent company — which must reflect arm's-length market conditions. Spain's transfer pricing rules require documentation and can result in tax adjustments and penalties if prices are deemed non-arm's-length by the AEAT.
Read definition →Whistleblowing Channel
A whistleblowing channel is a secure reporting mechanism allowing employees, contractors, suppliers, and other stakeholders to report suspected legal violations, ethical breaches, or corporate misconduct — typically anonymously. EU Directive 2019/1937 on the protection of whistleblowers and Spain's implementing Law 2/2023 make it mandatory for private companies with 50 or more employees and all public sector entities.
Read definition →Working Capital
Working capital (capital circulante or fondo de maniobra) is the difference between a company's current assets and current liabilities. It measures the short-term liquidity available to fund day-to-day operations. In M&A transactions, the normalised level of working capital is a key component of price adjustment mechanisms and completion accounts.
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