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Tax Obligations When Closing Your Business
Tax Agency (Hacienda)Tax forms
As a result of the decrease in sales of your company, you have decided to close. Despite this, remember that your company must continue submitting a series of statements, even if you haven’t had to pay taxes for them. Here we are going to detail what responsibilities you have if you close your business.
1. Self-employed workers
Statements that you should not forget to submit in the year of dissolution:
– If you file quarterly statements, remember that after declaring the end of the activity, you must still submit the tax forms for the quarter in which said cessation occurs.
So, for example, if you unsubscribe on May 31, 2020, you must still pay the taxes for the second quarter of 2020 with a deadline of July 20.
– Likewise, you must also submit the annual summaries and annual declarations of the year of cessation. That is: form 390 (annual VAT summary), form 180 (withholdings on premises), form 190 (professional withholdings) and form 347 (operations with third parties greater than 3005,06 euros).
Besides, you must submit the income tax return, having had an activity on your own. Thus, if you cancel your self-employment as of May 31, 2020, in 2021 you must include the income from January and May 2020 in your income statement (“renta”).
2. Companies
If you are the administrator of a company, do not neglect this task! Otherwise, the Tax Agency will first sanction your company. If it turns out that it does not have enough assets with which to pay the debt, it will demand payment from you as a subsidiary responsible.
Statements that you should not forget to submit in the year of dissolution:
– After communicating the end of the activity, you must still submit the tax forms of the quarter in which said cessation occurs.
– You must also submit annual summaries and annual declarations for the year of cessation: Corporation Tax, VAT, withholdings, form 347, etc.
– Finally, do not forget to submit the fractional payments of the Corporation Tax after the cessation and that are to be paid.
Keep in mind that the obligation to make the Corporation Tax declaration is maintained every year, so you must submit them every July until you liquidate the company.
If you have already declared your company inactive for a while and you stopped filing any of these statements, consider filing them now before the Treasury requires your company. Thus, you will reduce the amount of the sanction.
However, if the Tax Agency has already requested your company and it has not paid the penalties, it is best that you do nothing. Just wait for the Treasury to declare your company as a failed debtor. They will initiate a procedure of derivation of liability and act against you, as administrator. In this way, the sanction will be lower.
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