B Law & Tax
01 June 2023

Tax advisor: CNAE Code and its inclusion in tax forms

The CNAE code, which stands for National Classification of Economic Activities, is a classification system used to categorize and group economic activities carried out by companies and self-employed individuals. It is used in many countries, including Spain, to facilitate the collection and analysis of information on the business fabric.

The CNAE code is necessary to include in certain tax forms because it provides detailed information on the main activity carried out by a company or self-employed person. This code makes it possible to precisely identify the type of economic activity carried out, which is essential for determining the corresponding tax obligations.

By including the CNAE code in the tax forms, the tax authorities can properly classify and analyze the information submitted, ensuring a correct application of tax regulations and facilitating tax compliance by both taxpayers and the entities in charge of tax administration and control.

It is important to understand the difference between the CNAE and the IAE, since, despite being numerical codes, their usefulness differs significantly.

The IAE, or Economic Activities Tax, is a local tax levied on the exercise of business, professional or artistic activities in a specific municipality. The IAE classifies taxpayers according to their economic activity and company size, and is used to determine the amount of tax payable. Its main purpose is tax collection and tax control at the local level. The IAE rates include information on the quota assigned to each economic activity or the criteria used to determine such quota in each of the economic activities contemplated.

It is essential to bear in mind this distinction between the CNAE and the IAE, since each serves a different purpose. The CNAE focuses on the classification and analysis of economic activities, while the IAE focuses on the collection of local taxes based on business activity.

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