5 Spanish compliance myths that can cost you in penalties and back taxes

1. You can use UK accounting standards

Spain requires Spanish GAAP (PGC) for statutory accounts, even if you report in IFRS elsewhere. The correct approach: run dual books from day one, or face rejected filings and Hacienda scrutiny. 

2. VAT registration can wait until you're profitable

You're legally required to register before your first supply of goods or services in Spain, regardless of profit. Delayed registration means penalties, interest, and the nightmare of backdated compliance.

3. Employment contracts are standard across the EU

Spanish labour law is protective and rigid, with mandatory clauses, collective bargaining agreements, and dismissal rules that differ drastically from UK or US norms.

4. Corporate tax is straightforward at 25% (23% if turnover less than 1m)

That's the headline rate, but regional surcharges, permanent establishment rules, transfer pricing requirements and anti-avoidance provisions create a minefield most finance teams underestimate.

5. You only need one accountant

Spain demands dual expertise: a gestor for regulatory compliance and a UK/international accountant who understands your reporting standards. Trying to do both with one advisor creates dangerous gaps in either compliance or strategic oversight.  Are there any Spanish compliance myths I've missed out?

++ I'm Rolf, I talk about business compliance, Spanish market entry and accounts in Spain's complex business landscape. Follow this blog for insights, tips and advice about cross-border accountancy.