How to pick an Accountant?

Hiring an accountant in Spain is crucial for navigating complex tax obligations and bureaucratic processes, ensuring compliance and freeing up time for business focus, while apps or cheap services may lack personalized support and understanding of local requirements.

Introduction

Navigating Spain’s financial landscape can be daunting, especially when dealing with intricate tax laws and bureaucratic processes. Hiring an accountant can alleviate this burden, allowing you to focus on growing your business while ensuring compliance with Spanish authorities. In this guide, we’ll explore the benefits of hiring an accountant, the limitations of apps and web services, common mistakes to avoid, and the importance of understanding your tax obligations in Spain.


Why should you hire an accountant?

  • You want to concentrate on your business
  • Dealing with the Spanish authorities is particularly gruesome and time consuming
  • You do not want to make any mistakes, the Spanish Tax Agency is merciless
  • A good accountant does not only do accounting, he is a key business development partner

What about apps or cheap web services?

  • The reasons mentioned before also apply for freelancers, an App does not change that
  • A good accountant will advise you on, or even provide, systems to use, not all Apps are good
  • Apps or cheap web services leave everything up to you, they do not advise or assume any responsibility
  • An App can never provide the trust and understanding a human can

What are the key mistakes to avoid?

  • Do not go for the best price, you will pay in the end…
  • Make sure your accountant speaks your language and understands your expectations
  • Make sure they have the local connections needed in a latin country
  • Check if they have modern systems (cloudbased, 24/7 accessibility, paperless, digital ID’s etc.)
  • In Spain anybody can be a gestor and there are many unqualified operators, check reviews and publications!

What are my tax obligations?

  • Monthly or quarterly and annual VAT declarations
  • Quarterly and annual Retained Income Tax declarations (Employees and Professionals)
  • Quarterly and annual Retained Income Tax declarations (Rent)
  • Distributed Dividend Tax declarations
  • Quarterly and annual Company Tax Declarations

How much should you expect to pay?

  • Unfortunately, the industry is not regulated and price differences can be big and confusing. An offer on the internet can be several times less than a “boutique” price
  • The price depends on the services provided. We have 3 well documented levels but in many cases it is not clear what you are paying for and you get charged for “additional” services later
  • Many businesses are unhappy with the service they receive and choose to change accountants later, incurring in additional costs and effort that can be avoided.

Business in spain is different

  • In Spain dealing with the authorities is confusing and frustrating due to many different entities and systems
  • Hacienda has as an objective to maximize tax income for the state whereas in other countries the tax authorities have a more supporting role focussed on fomenting and supporting business
  • In order to deal with the local authorities you need a mix of technical and social skills. When the system does not work, being able to access real people and get them to solve your problem is important and can save your life.

Are notaries necessary?

  • Notarios “give faith” like they say here, they basically guarantee that the persons, companies and the agreements they enter are real and proven. They are a bureaucratic layer that Blockchain technology could replace in a near future, similar to the “procuradores” that act as mailmen in the courts.
  • Now that funds come available to minimize the economic effects of Covid, it is key for Spain to use these to reduce the administrative inefficiency and make it easier for companies to do business
  • Gestores are another example of an old fashioned industry, 80% of the local accountants still work paper based, something that is very inefficient, expensive and error prone.
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The information contained herein is of a general nature, and subject to changes. Applicability to your specific situation should be determined through consultation with our tax or legal advisors.