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IAE is the Spanish acronym for Impuesto sobre Actividades Económicas, i.e. trade income tax. It is a tax levied on economic activities in Spain.

When becoming self-employed or setting up a company, it is necessary to register with the IAE and choose the type of economic activity you wish to carry out.

Businesses are exempt from paying IAE during the first two years of operation or when the income from their activity is less than one million euros.