Access to quality services

An unbeatable location for your company that will reinforce your prestige.

This month, we want to highlight one of the services our clients are using most: the tax or registered office of their companies in our coworking space.

Opt for a direct debit service in IL Coworking & Legal Services It's a smart choice for freelancers, startups, and small businesses looking for flexibility, corporate image, and legal compliance without the costs of a traditional office. Plus, you can do it in a prime location in Madrid like ours, and with the support of a great professional team, the benefits multiply.

We're sure you've often wondered how you can make your business more efficient and reduce operating costs, considering that you'd like to improve your corporate presence without investing in physical infrastructure.

According to Statista, Madrid is one of the 10 best cities for business in the world. From its diverse accommodations to its competitive dining scene, to the efficiency of its airport, Madrid is a hotbed of commercial activity that could benefit any business venture. If, in addition, as is the case with IL Coworking & Legal Services With a central location and excellent transport links, you will benefit from unbeatable added value.

Thanks to our registered office service, you'll have a prestigious address without having to invest in a physical space in the city. But this aspect becomes even more important if you have access to quality services like those offered by our company. IL Coworking & Legal Services, where you can count on telephone assistance, mail reception, meeting rooms, and flexible, bright, and quiet workstations. We also offer personalized service in terms of accounting and tax guidance, as well as legal advice on matters that may be of interest to you in your day-to-day business.

Domiciliating your business in Madrid not only means having a prestigious address, but also enjoying a series of services that can facilitate the management of your business. With us, you'll have all of this guaranteed.

ECONOMY

The CPI eased three-tenths of a percentage point in May, to 1.9%, the lowest value since October.

The Consumer Price Index (CPI) fell three-tenths of a percentage point year-on-year in May, to 1.91%, its lowest level since last October, according to data released by the National Statistics Institute (INE).

With the year-on-year CPI moderating in the fifth month of the year, inflation has seen three consecutive months of year-on-year declines.

The larger-than-expected drop in the CPI is explained by the lower prices recorded for leisure, culture, and transportation, and by the fact that electricity prices rose less in May than in the same month in 2024. As for core inflation (excluding unprocessed food and energy products), it is returning to a moderating trend after experiencing a four-tenths increase in April and once again rising above the general index, where it remains.

Furthermore, inflation remains below the European Central Bank's (ECB) 2Q13 benchmark, which analysts say supports the possibility of a further interest rate cut—the eighth since June 2024—at next week's meeting.

Sources from the Ministry of Economy, Trade, and Business have emphasized that this drop in inflation "has been particularly important due to the favorable performance of tourism-related services and the positive performance of electricity prices."

The INE (National Institute of Statistics and CPI) includes an estimate of underlying inflation (excluding unprocessed food and energy products) in its advance CPI data. This also eased by three-tenths of a percentage point in May, to 2.1%, two-tenths of a percentage point above the overall inflation rate.

With this rate decline in May, the underlying rate returns to a moderate path after experiencing a four-tenths rebound in April.

In monthly terms (May over April), the CPI remained unchanged, ending the streak of monthly increases of the last seven months.

Meanwhile, the harmonized consumer price index (HICP) fell three-tenths of a percentage point year-on-year in May, to 1.91% Q3PR, and recorded a monthly decline of 0.11% Q3PR. Core HICP inflation is estimated at 2.11% Q3PR for May, according to Statistics.

 

 

ACCOUNTING MANAGEMENT

What is the use of monitoring your business accounts?

What's the point of monitoring your business accounts? The answer is simple: you must remember that proper accounting is the best way to measure and understand the situation of your business. To do this, you first need to know your company's financial status so you can make the decisions you deem appropriate.

On this occasion we offer you six practical tips that will be very useful for effective control

• Ask for help if you need it. Turn to professional managers or advisors to handle your business's accounting tasks. Remember that thanks to our partner, ACOUNTAX MA-DRID, you'll have the best possible accounting guidance service, tailored to your specific needs.
• Review your transactions and organize your records. Monitor all your bank transactions daily and group them into different categories. For example, into categories such as personnel, suppliers, supplies, or debts.
• Back up your documents. Make digital copies of all documents that can prove your business's banking transactions and keep them for at least six years, in accordance with Article 30 of the Commercial Code. These documents include invoices, contracts, receipts, and tickets.
• Create a calendar with important dates. Add the days on which you need to pay special attention to your business accounting. Clear examples include monthly VAT returns, quarterly accounting closings, and tax payments.
• Stay in constant training. Sign up for courses that will help you better understand the various basic accounting concepts to better understand your business's financial situation.
• Take advantage of new tools. Include programs or applications that help you record and automate all of your business's accounting processes, for example: Excel and Google Sheets.

What is business accounting for?

First, it's a legal obligation that guarantees the viability of the business, avoiding significant penalties. Recording financial transactions and paying taxes isn't just a legal requirement; it also has several benefits.

Advantages of keeping a company's accounting up to date:

• You get a clear view of your financial situation.
• You can make more strategic decisions for the future.
• It is a way to control inventory and assets.
• It allows to evaluate the financial performance of the business.
• It facilitates the granting of financing to the company.
• It helps to improve internal management.

Ultimately, accounting is a key tool in business management. Not only is it required by law, but it's also crucial to the solvency and success of any business.

Accounting, on the one hand, protects the rights of the various stakeholders involved in companies. This includes shareholders and creditors, but also employees and customers. On the other hand, it enables companies to fulfill their accounting obligations and contributes to market transparency. This makes it easier to detect fraud and malpractice, promotes fair competition, and strengthens trust in the market.

BUSINESS PREVENTION

Loss-making business: how to identify problems early and solve them.

At a time of significant global socioeconomic uncertainty, we consider it appropriate to introduce an analysis of the losses looming over some companies and how to identify and reduce them in a timely manner. We are well aware that this can be a sensitive issue, and the ideal approach would be to focus on loss prevention before reaching the point of possible bankruptcy or liquidation.

If, as a business owner, you've noticed losses in your accounting records, don't be alarmed. It's common for any company that begins to record losses to consider closing or dissolving. However, this would be the final step in a drastic measure, as there are prior mechanisms and tools that can be very useful for your sustainability and viability.

The goal will always be to provide the best accounting solutions and achieve economic recovery. In any case, to address loss reduction, the first thing we must know how to identify is when a loss-making company needs to find a solution.

Warning signs

If you want to identify whether your company is losing money, take a close look at these factors:

• Financial statement analysis: If these indicators show a downward trend or are below your industry average, it's time to investigate further.
• Stagnant or declining sales: Keep a close eye on your company's sales figures. If you notice a trend of stagnant or declining revenue, it's a sign that something isn't working properly.
• Increased operating expenses: Keep careful track of your operating expenses. If you notice a sustained increase in production, distribution, or administrative costs, it's important to investigate the reasons behind this increase.
• Slow inventory turnover: This is a critical issue for many businesses. Slow inventory turnover may indicate that your products aren't being well received by the market or that you have excess stock.

What really makes the difference between success and failure is the ability to identify and address these problems in a timely manner.

At this point, the next step is to understand how to reduce losses in a company so we can provide real solutions. In this regard, we offer some tips:

• Reinvest: Would the company's finances support one more investment? The company may need to innovate its products or services, implement strategy and marketing campaigns, or undertake digital transformation, etc.
• Profitability study: Only by analyzing a company's profitability can we identify the least profitable factors. Rather than dissolving it, it's better to transform the business.
• Corporate restructuring: A cost-cutting measure that would be best implemented only in extreme cases, as it could involve drastic decisions, for example, regarding the composition of the workforce.
• Cost optimization: This decision translates into improved business processes with the goal of minimizing costs. What type of processes? Any process that could be improved: procurement of goods and contracting of services, administrative management, distribution and logistics… Optimization will help reduce time and save money.
• Strategic negotiations with suppliers: Negotiating with your suppliers can be key to obtaining better terms and prices.

TELEWORK

Digital nomads: residency for foreigners who work remotely.

The Spanish government is considering a new option for obtaining residency: digital nomads, which is rapidly gaining popularity in our country. In this regard, the Ministry of Economy reminds non-EU citizens that they can apply for residency for international teleworking to carry out remote work or professional activities for companies based outside the country, using only computer, telematics, and telecommunications systems and resources.

In the case of carrying out a work activity, the holder of an international teleworking permit may only work for companies based outside the national territory.

In the case of exercising a professional activity, the holder of an international teleworking permit will be permitted to work for a company located in Spain, provided that the percentage of such work does not exceed 20% of their total professional activity.

Requirements

• Proof of having graduated or postgraduate degrees from prestigious universities, vocational training centers, and business schools, or having at least three years of professional experience.
• Existence of real and continuous activity by the company with which the applicant contracts.
• Documentation proving that the employment or professional relationship can be carried out remotely.
• Proof that the employment or professional relationship between the applicant and the employee has existed for at least three months, as well as documents confirming the terms and conditions of the remote activity.

Types of permits and duration

• Visa: If the applicant is outside of Spain, they will obtain a permit to reside and work throughout Spain, if they wish. The permit is valid for one year, unless the work period is shorter, in which case the visa will be valid for the same period. After this year, they must apply for a residence permit.
• Residence permit: Once the applicant is legally present in Spain, they will receive a three-year permit to reside and work throughout the country, if they wish.

The work that knows no borders

The labor market is changing. And not only because new technologies are opening the door to new professions. These advances have also revolutionized the organization and management of work flows.

The consolidation of teleworking and the development of new tools that allow us to perform tasks remotely have given rise to new ways of understanding how, where, and when we work.

Among the vast array of new trends, digital nomads have become a global phenomenon that redefines the rules of the game. They have not only embraced remote work, but have taken this concept to the next level, combining their professional career with the ability to live anywhere in the world.

Streamers, freelancers, content creators… These and other new professions open the door to new opportunities that, in most cases, are characterized by greater flexibility and freedom. The growing popularity of this trend is not only linked to the pursuit of quality of life but is also supported by the development of new technologies.

CURRENT TAX

Remember to check your tax information on your personal income tax return.

Regarding personal and family information, we recommend that you review the information on descendants and ascendants. Thus, if you have children, make sure they appear on the tax return, as well as the minimum amount for descendants to which they are entitled. Do the same for the minimum amount for ascendants, if you live with a parent over 65 with an income of less than 8,000 euros.

In the case of the birth of a child, you will be entitled to an additional minimum of €2,8000 in the year of birth and the following two years, hence the importance of checking this information on your tax return. In the case of adoption or foster care, this additional minimum applies in the year of registration in the Civil Registry and the following two years, regardless of the child's age. If you are separated or divorced, it is important to ensure that you include compensatory pensions and alimony payments on your tax return.

Regarding the monitoring of data related to employment income, it is important to note that if you receive income from employment, in addition to Social Security contributions and the €2,000 "other expenses," you can also deduct union dues, with no quantitative limit.

You can also deduct the membership fees paid to your professional association, up to a limit of 500 euros per year.

In any case, for membership fees to be deductible, you must be required to pay them based on the type of activity you carry out.

On the other hand, if you have paid legal and defense expenses during the year for disputes with the company that provides you with income, you can also deduct them, up to an annual limit of 300 euros.

Likewise, if you are a worker with a disability equal to or greater than 33%, you can deduct an additional expense of 3,500 euros. This amount increases to 7,750 euros if the disability is equal to or greater than 65%, if you can prove that you need assistance from third parties, or if you have reduced mobility.

If you are registered with the Employment Office and accept a job that requires you to change your address, you can deduct an additional expense of 2,000 euros in the year of the move and the following year.

Finally, if you have shared property, also check the imputation of real estate income.

There is a possibility that the Treasury may attribute the 100% income to a single owner, when it should actually be allocated to several owners. It is also important to verify that there are no differences in the percentage of ownership held by each co-owner.

More than half of companies view taxes as a "serious limitation" on their activities.

According to the Business Survey prepared by the World Bank for Spain and presented this May at the Madrid Chamber of Commerce, 54.21% of companies in Spain believe that tax increases are a serious constraint on their business. This proportion is double the European average of 271%.

Furthermore, the figure not only far exceeds the European average, but also the global average, which stands at 26%. Furthermore, the regional differences within Spain are also significant: while in Castile and León, 65.7% of companies consider taxation an obstacle, in southern Spain the percentage reaches 60.6%; and in Madrid, it is 59.3%.

Criticism from the business community is not limited to the tax burden. This study highlights that 36.81% of companies report that their relationship with the Tax Agency is a hindrance to their activity, a figure three times the European average of 12.81%. By sector, those most opposed to taxation are food distribution companies (67.41% of companies), machinery and equipment manufacturers (67.41% of companies), and retail trade (67.11% of companies). At the other extreme are professional activities (37.61% of companies).

During the report's presentation, Normal Loayza, director of the World Bank's Global Indicators group, noted that tax burden in Spain exceeds that of other high-income countries. According to the study, the effective social security contribution rate is 261% of GDP in Spain, compared to 201% of GDP in comparable countries, and the corporate income tax rate is 241% of GDP, compared to the international average of 171% of GDP.

TODAY COMMERCIAL

Remember that it is now mandatory to attempt an agreement before initiating a commercial or civil lawsuit.

Since last April, a key part of Organic Law 1/2025, on the Efficiency of the Public Justice Service, has come into force. This law introduces the obligation to resort to Appropriate Dispute Resolution (ADR) in civil and commercial matters before initiating any judicial process, with the aim of reducing litigation and streamlining conflict resolution.

The law, promoted by the Ministry of the Presidency, Justice, and Parliamentary Relations, establishes that, with the exceptions provided for—protection of fundamental rights, filiation, bankruptcy, precautionary measures, or cases of gender-based violence, among others—it will be mandatory to prove an attempt at an out-of-court settlement before filing a claim. Among the mechanisms contemplated are mediation, conciliation, independent expert opinions, confidential binding offers, collaborative advocacy, and direct negotiation between the parties.

This measure shifts from a culture of litigation to one of dialogue and agreement, thereby reducing the workload of the courts and offering citizens a faster and more efficient way to resolve conflicts.

Furthermore, the rule modifies the system of costs, as the courts will assess whether either party has effectively refused to resolve the dispute consensually, which will impact the criteria for imposing them.

The Public Justice Service Efficiency Act provides for a profound reform of the judicial system—which will come into effect gradually, beginning July 1, 2025—that will transform it into a more agile, flexible, and responsive structure in the face of court congestion.

The regulation transforms the 3,931 single-judge courts into 431 First Instance Courts, each administratively assisted by a Judicial Office. This will allow, for example, a specialization of judicial positions, which will be organized by sections, facilitating the standardization of jurisdictional and organizational practices.

The importance of the shareholders' agreement in startups

The shareholders' agreement is the contract signed by all (or some) of the company's partners. It regulates certain aspects affecting their status as partners, outside of the bylaws. Its objective is to regulate issues such as the way the company is organized or the partners' roles and commitments to the project. All this with the goal of avoiding future conflicts. Furthermore, the shareholders' agreement makes it possible to regulate the

Despite being such a useful formula for any company, the truth is that it is relatively unknown and poorly implemented. Companies often think that having bylaws is enough, so if they don't have this type of agreement, they can—and do—run into problems in the future.

Following the approval of Law 28/2022, of December 21, on the promotion of the emerging business ecosystem (or the "Startup Law," as it is now commonly known), the shareholders' agreement once again takes on special importance.

Firstly, because it has always been a regulatory instrument specific to this type of company (although it has a reason to exist in any type of company) and, also, because it is in this Law where it is given a letter of nature, both by recognising its possible registration in the Commercial Registry, and by regulating the possibility of establishing compliance with the shareholders' agreement as an accessory service that the partners must fulfil as holders of shares/stocks associated with said service.

The "Startup Law," therefore, in line with this aim of ensuring greater legal certainty and transparency, recognizes the possibility of registering these shareholder agreements in the Commercial Registry. Thus, taking into account the public nature of the Registry, it allows anyone to access and understand the content of these agreements.

As we can see, this reinforces the importance of having a shareholders' agreement, both for startups and for any other type of company, and opens up interesting possibilities for defending third-party rights.

CURRENTLY WORKING

Self-employed workers must review and update their National Electoral Code (CNAE) before June 30.

In 2025, a new National Classification of Economic Activities (CNAE – 2025) was approved, replacing the 2009 classification. This classification will affect self-employed workers who are currently registered. Therefore, if you are self-employed, you must update the new code information for each of your activities. This is what the General Treasury of Social Security warned in a message on its social media. Remember that there is a deadline for this procedure that closes soon. Self-employed workers will have until June 30, 2025, to do so.

The update to the CNAE-2025 standard means that all self-employed workers in Spain must review and, in most cases, notify Social Security of their new economic activity code before the established date. This change may affect administrative procedures, contributions, and access to aid or bonuses.

The CNAE-2025 replaces the previous version (CNAE-2009) and its main objective is to update the system to reflect the evolution of the economy, including new activities and emerging sectors. This update brings changes in the restructuring of categories; for example, activities such as the sale and repair of motor vehicles have been divided into three new specific classifications. It also entails an adjustment to international regulations to facilitate the comparability of economic statistics. The CNAE-2025 incorporates 35 new activities and reclassifies others to reflect the current economic reality, especially in digital and emerging sectors.

If your CNAE-2009 code has a unique and direct correspondence with a new one in the CNAE-2025, Social Security will automatically change it, and you'll just have to check it in your personal account. However, if your activity has several correspondence options in the new classification, you must select and report the code that best matches your current activity. If you carry out several activities, you will need to review each one and report the new codes where necessary.

This issue is extremely important, as the CNAE code determines part of your contribution and can influence bonuses, benefits, and access to aid, as well as the premium for work-related accidents or occupational diseases. Furthermore, failing to update your CNAE code can negatively affect administrative procedures, inspections, or future aid, although specific penalties have not yet been defined.

An employee may provide personal data of his colleagues if there is a legitimate interest in exercising his defense.

The High Court of Justice of Madrid has confirmed that an employee may provide personal data about his or her colleagues if there is a legitimate interest in defending them.

Specifically, a Renfe employee has sued the transport company for not providing him with a work calendar indicating rest days, vacation days, work days, and assigned shifts. The employee is demanding a distinction compared to other colleagues who do receive this annual calendar and is submitting it to this process.

In this case, the judges assume the task of judging the exercise of the right to defense and the right to the protection of personal data.

In this regard, they conclude that the latter is not violated when the employee provides documents from other colleagues to prove their professional qualifications—as is the case here—because it is necessary for the exercise of their right to defense.

According to the ruling, the provision of personal data to judicial proceedings for evidence purposes can only occur if there is a legal basis to do so (legality of processing).

This lawfulness exists either when the data subject's consent is obtained, when the processing is necessary for the execution of a contract to which the data subject is a party, or in general, when the processing is necessary for the satisfaction of legitimate interests pursued by the data controller or by a third party, as is the case here.

The Labor Chamber notes that the plaintiff has a legitimate legal basis and that the processing of third-party personal data (the work schedules of his colleagues) is necessary to satisfy his interests, legitimate interests that are embodied in the exercise of the fundamental right to defense.

NEWS

IL Coworking continues to look for allies who share our vision.

In IL Coworking & Legal Services We continue to add exclusive benefits to our community. We're pleased to announce our collaboration with Hotel Finca Fuente Techada, a unique setting surrounded by nature, ideal for combining work and relaxation.

If you're an IL Coworking member, you can enjoy a 10% discount on the hotel's best public rate by using the promo code: ILCOWORKING when making your reservation.

And if you're a guest at Finca Fuente Techada and need a workspace in Madrid, you can also benefit from a 10% discount on individual workstations, private offices, and meeting rooms in our coworking space by booking with the code: FUENTE TECHADA (subject to availability).

An agreement designed to promote a balance between productivity and well-being.