Tax on Economic Activities (IAE)
What is the IAE?
The IAE is a mandatory municipal tax that applies to any economic activity carried out within the national territory by individuals, legal entities, and organizations with a turnover exceeding one million euros. Its management is shared between the State Administration, which maintains the taxpayer registry and classifies activities, and local administrations, which handle tax management. Three types of quotas are established for this tax: municipal, provincial, and national.
How is the IAE calculated?
The IAE is conditioned by the heading under which the activity is registered and the parameters defined by the regulating fiscal ordinance. A weighting coefficient is applied to the quota, regulated by the Local Finance Law, based on the net turnover and the activities performed. For municipal quotas, a situational coefficient is used to weigh the physical location of the premises within the municipality.
How can we help reduce it?
- Ensuring the correct classification of the activity.
- Analyzing the technical parameters determined by the Tax Administration, such as the activity’s heading, number of employees, surface area allocated to each activity, machinery nominal power in case of production, and company turnover.
- Applying case law and binding consultations that affect the final result of the tax.
- Reviewing the self-assessment submitted, as well as any technical parameters that may lead to savings if incorrect.
- Handling the administrative process related to preparing the necessary documentation and its submission.