The continuity of the operations of British companies in Spain may be threatened by the imminent exit of the United Kingdom from the European Union. The tax treatment of commercial transactions will change, and the arrangements to be carried out before the Spanish Tax Authorities must be carried out in the Spanish territory.
It is clear the advantages that can be reported to any company, to have a specialized professional firm that allows it to comply with all its tax, accounting, labor, customs and administrative obligations.
It should be noted that the accounting and tax obligations in Spain are different from those in the United Kingdom. The Spanish Accounting Plan is substantially different from that applied in the United Kingdom. It is necessary for companies to have professional accountants who master Spanish accounting regulations. And it’s not easy to find them.
Fortunately at SPANISH BRANCH OFFICE we have a group of these professionals accustomed to working as external accountants for Spanish and foreign companies operating in Spain.
In the post-Brexit era, these tasks can hardly be carried out from the UNITED Kingdom, and the presence in the field of professionals you trust is necessary. Professionals like us.
To this end, together with the specific impact that COVID-19 is having on each European country and territory, and these can only be known first-hand if the company has trusted professionals in the specific territory.
It is necessary for companies to have professional accountants who master Spanish accounting regulations. And it’s not easy to find them.
Company Accounting should be a complete, agile and effective information system that enables decision-making. When companies work in different territories it is necessary to have homogeneous information systems. This homogeneity does not always occur when accounting regulations differ in different countries, which happens between the United Kingdom and Spain.
In this situation, companies must be provided with qualified accounting professionals who are able to produce quality accounting information in Spain and who, in turn, are able to transmit this information to companies in the United Kingdom with information standards that they handle in their country.
Below is a brief explanatory tour of what the Accounting Standards are, and those applicable in Spain and the United Kingdom.
What are ACCOUNTING STANDARS?
Accounting standards are national or international specifications that concern different aspects of business accounting. The objective is, in this sense, to standardize the accounting and carrying out of balance sheets in the relevant judicial space by unifying the legal rules, so that information on both the situation and development of companies and on the use of the various financial resources can be verified and compared.
Accounting provisions can be found in national laws, exchange regulations, accounting regulations of private bodies designated by the State, or contractual provisions. With regard to consolidated accounts, due to increasing globalization and convergence of money markets, the focus is on international standards.
In the case of companies based in the European Union (EU) The International Financial Reporting Standards (IFRS) of The International Accounting Standards Board (IASB), better known in Spanish as The International Accounting Standards Board, is of vital importance.
ACCOUNTING REGULATIONS IN SPAIN
Commercial Code (CCo) and Capital Companies Act
In Spain traders and commercial companies have an obligation to keep their ledgers based on commercial criteria. These types of activities are governed by the Commercial Code (CCo) and the Corporations Act, which conceives as capital companies “the limited liability company, the public limited company and the share company” (Chapter 1, Article 1).
General Accounting Plan
A concretion of financial accounting set out in both the CCo and the Corporations Act and other legal texts is that of the General Accounting Plan (PGC), approved in 2007 by Royal Decree 1514/2007 and which stands as a broad adaptation of regulations to international standards known as IFRS. Small and medium-sized enterprises should, however, be guided by the General Accounting Plan for SMEs introduced by Royal Decree 1515/2007 of 16 November approving the General Plan for the Accounting of Small and Medium-sized Enterprises and the specific accounting criteria for micro-enterprises.
Like the other Member States of the European Union, officially traded Spanish parent companies carry out their balance sheets on the basis of IFRS.