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The tax on constructions, installations and works (ICIO) is an indirect, municipal, voluntary establishment and management tax exclusively attributed to the municipality that establishes it.

 Taxable event

The taxable event of the ICIO is constituted by the realization, within the municipal term, of any construction, installation or work for which the obtaining of a works license or urban planning is required, whether or not it has been requested, and if so, obtained or not yet, provided that its issuance corresponds to the exact city council.

Assumptions of non-subjection

Although the LHL does not expressly regulate the cases of non-subjection, jurisprudence and administrative doctrine have been shaping them, basically, based on the analysis of the requirement or not of the corresponding license. Thus, we highlight, among others, the following assumptions:

Illegal constructions or works , as long as their destination can only be demolition because they have been carried out without a license and are not susceptible to legalization.

  • Demolition works because their purpose is not to build a specific building, but to leave the land open for any urban use.
  • Building works on a municipally owned plot acquired by auction , in which the successful bidder agrees to build in accordance with a work program and project previously prepared and approved by the town hall, since the building permit had already been granted to the approval of the conditions of the auction and the project.
  • The urbanization works carried out in the execution of an urbanization project do not require an urban planning license as the project itself is the legitimizing act of the same and it is an act of execution of the urban planning instruments that are immediately executive.


Exempt from the ICIO is the carrying out of any construction, installation or work owned by the State, the autonomous communities or local entities , intended directly for highways, railways, ports, airports, hydraulic works, population sanitation and wastewater, regardless of whether their management is carried out by autonomous bodies, and whether they are new investment or conservation works.

Likewise, with respect to the Catholic Church , the Holy See, the Episcopal Conference, the dioceses, the parishes and other territorial circumscriptions, the religious orders and congregations and the institutes of consecrated life, their provinces and their houses, enjoy total and permanent exemption in the tax.

1) The exemption from which a religious congregation benefits for the works carried out on a property intended for the exercise of activities without a strictly religious purpose , may be included in the scope of the prohibition of State aid, if such activities are of a strictly economical nature and to the extent that they are.

2) When an entity of the Catholic Church carries out a construction, installation or work in a property that is affected at the same time by economic and non-economic activities, in order to partially apply the exemption for the latter, it is necessary to keep separate accounting records for each type of activity.

Passive subjects

They are passive subjects of the ICIO:

  • As taxpayer , individuals, legal entities or LGT entities that own the construction, installation or work, regardless of whether or not they own the property on which it is carried out. For these purposes, it is considered that the owner of the construction, installation or work is the one who bears the expenses or the cost that its realization implies.
  • When the construction, installation or work is not carried out by the taxpayer, they are considered substitutes for the taxpayer who request the license or carry out the constructions, installations or works. They are empowered to demand from the taxpayer the amount of the paid tax quota.

In the construction of a car park under a municipal administrative concession for its exploitation for a certain time, and after which it reverts to the city council, the owner of the work is the construction company and concessionaire.

Tax base

The tax base of the ICIO is constituted by the real and effective cost of the construction, installation or work, understood as such, the cost of its material execution regardless of the value of what was built or installed.

Are excluded from the tax base:

– VAT and other similar taxes specific to special regimes;

– Taxes, public prices and other patrimonial benefits of a local public nature related to constructions, installations and works;

– Professional fees;

– The business profit of the contractor;

– Any other concept that does not strictly include the cost of material execution.

Tax rate

The ICIO tax rate is the result of applying to the tax base the tax rate set by the council, which cannot exceed 4%.

The city council cannot establish different types of tax for different types of constructions, installations or works.


The ICIO is an instant accrual tax that occurs at the very moment the construction, installation or works begin, even if the license has not been obtained.


The competence to manage the tax corresponds entirely to each city council, which can demand it in a self -assessment regime , if so established in the respective tax ordinance.

Two types of settlements can be distinguished:

  • Provisional settlement on account . It is compulsorily practiced when the mandatory license is granted or when, the aforementioned license having not yet been requested, granted or denied, the construction, installation or work begins.

The tax base of this settlement is made up of:

– The budget presented by the interested parties, endorsed by the corresponding official association when it is obligatory; either

– The indices or modules that the tax ordinance establishes for this purpose.

  • Definitive liquidation . Once the constructions, installations and works have been completed, in view of those actually carried out and their real and effective cost, the city council, through the appropriate administrative verification, must carry out the final liquidation, modifying, if applicable, the tax base of the provisional liquidation. The taxpayer must be reimbursed or demanded, as appropriate, the corresponding amount.

The town councils can establish joint and coordinated management systems for the tax and the fee corresponding to the granting of the licence.

Source: Spanish Tax Calculator