Company IAE: form 848, municipal self-assessment and deferral of local taxes

The Tax on Economic Activities (IAE) is regulated in articles 78 to 91 of the texto refundido de la Ley Reguladora de las Haciendas Locales (consolidated text of the Local Tax Agencies Act, RDLeg 2/2004, TRLRHL). Exemptions include all natural persons and companies, civil partnerships and entities under article 35.4 of the LGT whose net turnover (INCN) is less than €1,000,000 (article 82.1.c TRLRHL). There is also an exemption during the first 2 tax periods of starting an activity.

Therefore, the company or entity whose INCN reaches or exceeds €1,000,000 pays IAE. The figure that counts is from the penultimate financial year before the accrual: the 2024 turnover determines whether you pay tax in 2026.

If your company is part of a group under article 42 of the Código de Comercio (Commercial Code), the Supreme Court (since ruling 274/2018, of 6 March, with reiterated doctrine) requires the threshold to be measured with the combined turnover only when the group acts as a consolidated group, meaning when it has the legal obligation to prepare annual accounts under a consolidation regime. If the group is not obliged to consolidate, each company measures the exemption with its individual figure, even if there is control between them.

Anyone who actually pays IAE must report their net turnover to the AEAT (the Spanish Tax Agency) (article 90.2 TRLRHL and Orden HAC/85/2003). The Order exempts you from submitting form 848 when this amount has already been stated in the latest Corporate Income Tax return (form 200), Non-Resident Income Tax (IRNR) or form 184 submitted before 1 January of the year in which the figure is to take effect for IAE. In groups obliged to consolidate, the exemption requires the parent entity to have declared the figure for the entire group.

If none of these scenarios apply, form 848 is submitted between 1 January and 14 February, both included, of the financial year in which the communication is to take effect. Companies and other legal entities are obliged to interact electronically with the Administration (article 14.2 of Ley 39/2015), so the submission is done online at the AEAT electronic headquarters, using the entity's electronic certificate: submitting on paper at offices or by post is not valid.

Furthermore, upon losing the exemption, you must submit the registration declaration in the tax registry using form 840 during the month of December immediately preceding the first year in which you pay tax, including the elements that quantify the quota (heading, surface area, power, etc.).

Submitting form 848 late can lead to a penalty under article 198.1 of the LGT for declarations submitted late without economic prejudice: a fixed fine of €200, which is reduced to €100 if submitted without a prior requirement from the Administration. Managora checks if your entity is exempt, and if not, prepares and submits form 848 for you: you can see the updated amount on the procedure's page.

The quota starts from the heading tariff (RDLeg 1175/1990), which includes the premises' surface area element. The weighting coefficient of article 86 TRLRHL is always applied to this tariff quota, which depends on the INCN and ranges from 1.29 to 1.35 (1.31 if the figure is unknown).

If the quota is municipal, the town hall can also apply a location coefficient according to the street category (article 87 TRLRHL: between 0.4 and 3.8), and the provincial council can demand a provincial surcharge of up to 40% on the already weighted municipal quota (article 134 TRLRHL).

Provincial and national quotas, which authorise you to carry out the activity throughout the province or the entire national territory, do not have a location coefficient or provincial surcharge and are collected by the AEAT.

Two types of management coexist in IAE: census management (registry, with forms 840 and 848, handled by the AEAT unless delegated) and tax management (assessing and collecting the quota, handled by the town hall or the provincial council or provincial body to which it delegates: ORGT in Barcelona, Suma in Alicante, OAR in Badajoz, among others). The distribution is regulated by RD 243/1995.

When census management is exercised by delegation, the delegated entity can demand the tax under a self-assessment regime: upon registration for a financial year, the company calculates and pays the quota itself (tariff by coefficients, prorated by quarters in the first year) instead of waiting for a receipt. In subsequent years, the quota is collected by padron (municipal registry) or tax registry in the period set by the local tax ordinance: in Madrid, for example, the voluntary period for 2026 runs from 1 October to 1 December.

Managora calculates the quota using the heading tariff, the weighting coefficient, the location coefficient of your street and the provincial surcharge, and submits the self-assessment to the town hall or competent body: this is the municipal IAE self-assessment procedure page, with the updated amount on the page itself.

Yes. Any local tax (IAE, IBI, IVTM, plusvalia municipal (local land value tax), tasas (official fees)) can be deferred or paid in instalments when the cash flow situation prevents payment on time (article 65 LGT, Reglamento General de Recaudación (General Collection Regulations) and the general tax ordinance of each entity). Deferral delays the payment to a single date; paying in instalments divides it into periodic quotas, usually monthly and paid by direct debit.

It is advisable to request it within the voluntary payment period: this way the debt does not enter the executive enforcement phase or generate executive period surcharges while it is being processed. It can also be requested in the executive phase, before the sale of seized assets.

The application identifies the debt, proposes a payment schedule, justifies the temporary cash flow difficulties and attaches the direct debit mandate. The Administration has 6 months to resolve it; if it does not reply, the silence is negative and the application can be understood as dismissed.

The maximum periods granted depend on each ordinance. As a reference, the Madrid Town Hall grants deferrals of up to 1 year and instalments of up to 24 months, which can be exceptionally extended up to 3 and 5 years respectively. Other entities stagger the periods by amount brackets.

Below the threshold set by each entity's ordinance, no guarantee is required: at the Madrid Town Hall, a guarantee is only requested when the debt is equal to or greater than €50,000, although other local entities maintain lower thresholds, such as €30,000. Once the threshold is exceeded, the usual guarantee is a joint and several bank guarantee from a credit institution or a surety bond certificate, which covers the principal and interest plus an additional percentage.

The deferral accrues late payment interest (article 26.6 LGT): in 2026, with the extended budgets, 4.0625% annually. If the debt is fully guaranteed with a bank guarantee or surety bond, the legal interest rate for money applies, which is 3.25% in 2026. The interest is paid with each instalment.

Managora studies your case, drafts the cash flow justification, prepares the guarantee if applicable and submits the application to the town hall or the provincial collection body: this is the local tax deferral and instalment procedure page. Order form 848 or the IAE self-assessment from their respective pages, with the updated amount on each. The deferral is studied on a case-by-case basis: if the debt exceeds the guarantee threshold, preparing the bank guarantee or surety bond and the payment plan requires a custom quote, which we will communicate to you before starting.