Accounting for Legal Entities

In Spain, an interesting situation has developed for Russian citizens: Spanish accountants, who obtain their status after a short four-month course, mostly deal with primary documents and payroll calculations. Tax calculations and contributions, however, are handled by auditors from external organizations. Therefore, from the perspective of most Spaniards, Russian specialists providing services to legal entities in Spain take on not only accounting duties but also perform auditing functions.

The tax system in Spain shares many similarities with the Russian system, including almost identical calculations for certain taxes. However, to perform auditing functions, one must have the appropriate licenses. Our company has taken care of obtaining all the necessary permits to offer a full range of accounting services—not only in the usual sense for Spaniards but also in the way it is understood in Russia, as a comprehensive service. As a result, our clients enjoy several advantages, such as less time and energy spent on document processing, preparation, and regular reporting, and, with proper planning, greater chances of obtaining tax incentives of up to 35%, for example, when investing in specific sectors of the economy.

As a member of the EU, Spain adheres to EU directives, including those related to accounting practices, auditing, and financial reporting. The basic legal framework for such activities is governed by the Commercial Code, which mandates that companies maintain accounting books and prepare financial reports in accordance with Spain’s GAAP (Generally Accepted Accounting Principles).

Each year, companies registered in Spain must submit reports reflecting transactions in chronological order. The list of required documents includes balance sheets, profit and loss statements, inventory lists, ledgers for goods and materials, and more.

All types of companies are required to keep accounting records and submit financial reports, including **S.R.L. (Sociedad de Responsabilidad Limitada)**, **S.A. (Sociedad Anónima)**, as well as general and limited partnerships.

Our company’s accountants maintain financial records in accordance with Spain’s Budgetary Code, including:

• Analyzing all incoming and outgoing invoices to ensure compliance with regulations;
• Calculating expenses and revenues;
• Preparing cash flow forecasts;
• Calculating payroll;
• Determining tax payments;
• Preparing balance sheets;
• Submitting documents to the Chamber of Commerce and the tax authorities in Spain;
• Maintaining reports on purchases, sales, and business registrations, including startups;
• Providing consultations, including advice on changes in taxation and accounting regulations.

The accounting principles (GAAP) in Spain are outlined in the **Plan General de Contabilidad (PGC)**, which is based on EU Directives. It defines the principles and rules of accounting, provides guidance on financial reporting, and offers instructions for the assessment of assets and liabilities. If international accounting standards change, corresponding amendments are made to the PGC.

If a company fails to meet its obligations to submit information to the Commercial Registry and misses deadlines, it may face a fine ranging from €1,200 to €60,000. The amount of the fine depends on the size of the company, its assets, and turnover. However, if the reports are submitted before the fine is imposed, the penalty can be reduced by up to 50% of the minimum fine amount.