Accounting obligations for businesses in Spain

Every company operating in Spain is subject to a series of accounting obligations established by the Commercial Code and tax regulations. Knowing them is essential to avoid penalties and maintain the financial health of the business.

What are accounting obligations

Accounting obligations are the set of legal duties that companies and self-employed professionals have regarding the recording, preparation and presentation of financial information. These obligations are primarily regulated by the Commercial Code, the General Chart of Accounts and tax legislation.

Fulfilling these obligations not only avoids penalties but also provides valuable information for business decision-making.

Mandatory accounting books

Day Book (Libro Diario)

The Day Book records all economic transactions of the company in chronological order. Each journal entry must include the date, the accounts affected, the amounts and a brief description of the transaction.

Book of Inventories and Annual Accounts

This book must contain:

• Trial balance of totals and balances: at least quarterly.
• Closing inventory: a detailed list of all the company's assets, rights and obligations.
• Annual accounts: balance sheet, profit and loss account, statement of changes in equity, cash flow statement (if applicable) and notes.

General Ledger

Although technically not required by law, the General Ledger is essential in accounting practice. It records the movements of each account individually, making it easier to track balances.

Annual accounts

Annual accounts are the set of financial documents that every company must prepare at the end of the financial year:

• Balance sheet: shows the company's financial position.
• Profit and loss account: reflects the economic result for the period.
• Statement of changes in equity (ECPN): details the variations in own funds.
• Cash flow statement (EFE): shows cash movements. Only mandatory for companies that cannot file an abbreviated balance sheet.
• Notes: supplement and expand the information in the above statements.

Annual accounts deadlines

• Preparation: the directors must prepare the annual accounts within a maximum of three months from the end of the financial year.
• Approval: the general meeting must approve them within six months of the year end.
• Filing: they must be filed with the Commercial Registry in the month following their approval.

Accounting obligations by company type

Commercial companies (SL, SA)

Companies have the broadest obligations:

• Maintain orderly accounting appropriate to their activity.
• Prepare and file annual accounts.
• Legalise accounting books with the Commercial Registry.
• File Corporate Income Tax.
• Submit VAT self-assessments.

Self-employed

Self-employed professionals have reduced accounting obligations, though these depend on their tax regime:

• Normal direct estimation: same obligations as companies.
• Simplified direct estimation: books of sales and income, purchases and expenses, and capital goods register.
• Objective estimation (modules): only books of sales and income and a capital goods register.

Co-ownership arrangements and civil partnerships

They must keep VAT record books and, if they are subject to Corporate Income Tax, must meet the same obligations as commercial companies.

VAT record books

Regardless of legal form, VAT taxpayers must keep:

• Issued invoices register: all invoices issued.
• Received invoices register: all supplier and expense invoices.
• Capital goods register: business assets above certain thresholds.
• Intra-community transactions register: if transactions are carried out with other EU countries.

Document retention

The regulations establish the following retention periods:

• Commercial Code: six years from the last entry of the financial year.
• Tax regulations: four years (tax statute of limitations), although it is advisable to retain documents for six years to cover both requirements.

Penalties for non-compliance

Failure to meet accounting obligations can result in:

• Tax penalties: fines for not keeping books, keeping them with errors or significant delays.
• Registry closure: if annual accounts are not filed, the company will be unable to register documents with the Commercial Registry.
• Commercial Registry fines: between 1,200 and 60,000 euros for failure to file accounts.
• Director liability: in cases of insolvency, failure to keep proper accounts can lead to personal liability.

How to meet your accounting obligations with Holded

Accounting software like Holded automates much of the accounting workload, enabling you to:

• Record journal entries automatically from invoices and bank transactions.
• Generate mandatory accounting books in digital format.
• Prepare annual accounts and export them in the required formats.
• File VAT and Corporate Income Tax returns.
• Keep all documentation organised and accessible throughout the legally required retention periods.