Corporate rental regulations in Spain Requirements, taxes, and legal keys Do you need to rent accommodation for displaced employees and want to ensure compliance with the regulations? Be aware that in Spain, this involves much more than just signing a contract .
In this article, we explain everything you need to know to legally and securely rent corporate accommodation . From contract types to the taxes you should consider, along with local regulations in major cities.
If you are a travel manager or handle accommodation for businesses , this guide will save you time... and potential fines. Let's dive in!
What is considered 'corporate rental' in Spain? Corporate rental refers to the rental of a property by a company for its employee to use during a work relocation . It is usually temporary and is governed by rules different from those of tourist or long-term rentals.
According to Article 3 of the Urban Leasing Law (LAU) , corporate rental can take the form of "Leasing for a non-residential use."
Article 3.2 of the LAU
đź“ś Article 3.2 of the LAU
"In particular, the following will be considered as such: leases of urban properties entered into for a seasonal period, whether it is summer or any other season, and those entered into for carrying out an industrial, commercial, craft, professional, recreational, healthcare, cultural, or educational activity on the property, regardless of the parties entering into the lease."
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Legal requirements for corporate rental In a corporate rental contract, the company rents a property for the temporary accommodation of its relocated employee.
The duration of the contract is flexible and can be established for a fixed or indefinite period , depending on the company's needs.
Keep this list of requirements in mind to avoid legal issues and ensure you can deduct the rental as a business expense:
The tenant must be the company, not the employee. The duration must be temporary. Corporate use must be justified by explaining the reason for the relocation. The accommodation cannot be part of a building with exclusive tourist use. Recommended clauses in the contract If you are sure that all the requirements are met, it’s time to draft the contract. Be sure to include the following clauses:
Object of the contract : Specify that the property will be used for corporate purposes, specifically for employee accommodation.Duration : Indicate the start date and, if known, the end date. If the contract is indefinite, outline the grounds for contract termination and the notice period.Payment conditions : Set the monthly rent, payment deadlines, the security deposit, and any additional expenses (e.g., water, electricity, community fees, etc.).Users : Identify the employees who will use the property.Corporate rental contract template Here is a template for a lease agreement for non-residential use, designed specifically for corporate rental.
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Taxes applicable to corporate rental Renting a property can be considered a deductible expense for the company , and in many cases, it can also be used to deduct the VAT paid. Here are the tax obligations and benefits to consider:
VAT on corporate rental Renting a property for corporate use is subject to VAT , as it is not considered residential rental. If the accommodation does not include hotel services, the applicable rate is 21%. However, according to Article 91 One.2 2nd of Law 37/1992 on Value Added Tax, a reduced rate of 10% applies to hospitality services, meaning that apartments with services may benefit from this reduced rate.
The company can deduct the VAT paid on its quarterly returns using Model 303 , which reduces the total cost of the rental.
Corporate tax on corporate rental If the rental is intended to accommodate relocated employees, the company can reduce its taxable base in the Corporate Tax (Impuesto de Sociedades) and, consequently, the amount to be paid.
To do this, the company must submit Form 200 annually.
Complying with corporate accommodation regulations When a company decides to rent a property for its relocated employees, it must ensure that it complies with all applicable regulations. Failing to do so can lead to legal and financial risks , including the following:
Administrative fines: If the company fails to ensure that the property is used exclusively for corporate purposes, it could face financial penalties from the relevant authorities.Loss of the right to use the property: If it is found that the contract does not comply with the regulations, local authorities may require the company to vacate the property.Tax issues and tax claims: If the company does not properly declare the rental or does not comply with VAT or Corporate Tax requirements, it may face claims and penalties from the Tax Agency.How to choose accommodation that complies with regulations? As you’ve seen, there are several legal and tax requirements to comply with: proper contract formalization, local regulations, and tax laws. All of this makes finding compliant corporate accommodation a time-consuming and meticulous task .
To ensure compliance with all regulations and avoid the risks mentioned earlier, it is crucial to work with a specialized corporate accommodation manager
Apartool
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