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MODULAR TAX SYSTEM



Most small business owners in Lanzarote (and other areas of Spain) consider this the best system to operate their taxes under and so if you are looking to buy a bar in Lanzarote (or other business) you are likely to hear that the owner operates under the modular tax system. The system is quite straightforward and quite different from the normal profit and loss system that many UK business owners would be used to.

  • The modular tax system is an estimated tax system. In brief you are taxed on how many chairs and tables you have, how many full time employees you employ and the wattage of electricity your unit requires.
  • The modular tax due is calculated and set on the 1st of January of each year and you are charged this amount every quarter of that year
  • Each municipal charges slightly different rates per table but the difference is minimal
  • Because this figure is set many people do not keep books or accounts as there is no necessity to do so, however many owners will keep records of some sort for their own interests (this is indicated on our website listings). Most owners are reluctant to give these records out unless someone is very seriously interested in the premises and usually after we have had escorted viewings and they have met you personally.
  • This system is a good system but remember the amount is set and cannot be changed so if you have quiet periods you still have to pay the same amount of tax even though you might not be earning a great deal.
    An example of what you would pay per quarter could be estimated as:
    10 tables
    1 full time worker
    1 owner's name on the licence
    Tax due per quarter approx: 500 euros

This is purely a brief guide about the modular tax system but if you would like more in depth information then we would suggest that by registering with us you can look at our expert buyers guides which includes a guide to the tax systems in Lanzarote. When you are in a position to purchase a bar or other business in Lanzarote then we would strongly advise that you discuss with an accountant or gestoria over here what system they recommend you operate under.


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