Understanding Activities Tax, Public Revenue, and Business Regulations

Posted on Feb 12, 2025 in Law

Activities Tax (IAE)

The Activities Tax (IAE) is a municipal tax; the collecting body is the Town Hall. This characteristic distinguishes it from other taxes, which are collected by the Ministry of Finance at the state level. The IAE is a direct tax of a real character that aims to tax the exercise of a business, professional, or artistic activity within the territory. Business activities are considered to be: livestock (independent), mining, industrial, commercial, and services. Until 2002, it was imperative for a company to pay the tax to start a business. From that year, new legislation, the Local Finance Law, allows any business with a turnover below one million euros per year not to pay this tax. In contrast, companies that bill more than one million euros will pay more.

Taxes and Their Classes: Public Revenue

  • Social security contributions.
  • Homepage More Income Taxes.
  • Current transfers.
  • Income asset.
  • Privatization income from capital transfers.

Taxes: These are the kind of government revenue in the budget of the state. They have binding force for taxpayers, and their purpose is to obtain the resources needed to finance spending or control the country’s economic activity. They are classified into:

Fees

They generate monetary benefits for a public entity, as opposed to a public utility, or by the performance of an activity, they provide a direct benefit to the user. Examples: Sports facilities, trash collection, driving test/selectivity.

Contributions

These are taxes that are paid to a public entity by an individual for a specific reason, but the profit from the money invested will not be only for the taxpayer but for the whole community. They are municipal.

Taxes

These are payments required by the government without there being direct consideration for the taxpayer; that is, there is no specific destination for this money. State organs.

Accounting Standards

These articles are collected in accounting obligations:

  • The employer must keep proper accounts.
  • You must keep a book of inventories and annual accounts and another journal.
  • The accounts would be managed directly by employers or persons duly authorized as agents.

Trading companies also have to keep a minute book, which shall include at least all the resolutions adopted, calls, a summary of issues discussed, interventions, and the results of voting.

Competition and Publicity

In order to ensure competition in the markets and ensure that it occurs fairly, laws have been created:

  • The Competition Act, which punishes conduct that would prevent, restrict, or distort competition in the domestic market.
  • The General Law on Advertising, which demands that advertising be conducted in a fair framework, without causing harm to persons, harming persons, or violating securities or rights under the Constitution.

Register of Companies

It is a state agency under the Ministry of Justice through the General Directorate for Registries and Notaries, which aims at the official advertising of the legal situations of employers enrolled in it, in addition to other duties assigned by law. Its aims are:

  • Add companies at the time of their constitution.
  • Legalizing the books of companies.
  • Register the parents.

The Companies Registry is divided into Territorial Registries, one in each provincial capital and another one in Ceuta and Melilla, and a Central Registry that collects information from around the state.