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Can I save on taxes by creating a company? In some cases, yes. Example: Stan is a resident of Spain and earns a 100,000 salary from outside Spain. Stan has two choices: pay personal income tax in Spain (if he is paying income tax elsewhere then this can be reduced). Stan is in the 42% income bracket, so he will pay 42,000 euros. Establish an SL, and the SL pays him. Stan company pays a corporate tax of 30% (after the first three years, this rises to 35%). However, corporate tax deductions are extensive in Spain. Stan deducts housing, car, and food for 50,000 euros. 30% of the remaining 50,000 euros is 15,000 euros, so the savings are well worth the costs of SL creation and accounting. With an SL, there are more options: money that Stan does not plan to spend in the near future can be put in the company reserves, making it nontaxable
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