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"TAX OBLIGATIONS IN SPAIN. CORPORATE TAX"

The income obtained by companies located in Spain is subject to corporate income tax. This tax applies to profits obtained by both commercial companies and legal entities. The tax period always coincides with the company's financial year. In no case may the tax period exceed twelve months.

How to calculate corporation tax

To calculate corporate income tax, the following process must be applied:

  • Once the accounting result has been obtained, adjustments are made to calculate the taxable base.
  • It should be noted that it is possible to reduce the taxable base or offset tax losses from previous years.
  • Once this has been done, the corresponding tax rate is applied in each case. It should be noted that some deductions or allowances affect the overall calculation of the tax liability.

On the other hand, Article 35 of the Corporate Income Tax Act establishes deductions to encourage the performance of specific activities, specifically the deduction for research and development and technological innovation activities. The carrying out of research and development activities will entitle the taxpayer to a deduction from the gross tax payable under the conditions established in the article above.When is corporation tax paid? The tax return must be filed within 25 calendar days, six months after the end of the tax period. Therefore, if an entity makes its tax period coincide with the calendar year, it must settle and pay corporate income tax by 25 July.

orporate Income Tax is a complex tax.

Corporate Income Tax Rates

  • It is essential to remember that corporate income tax must be filed even if no income was earned in the previous year or the company is in insolvency or liquidation proceedings.

The general corporate income tax rate is 25%, although other rates apply to specific entities: for entities with a net turnover in the immediately preceding tax period of less than 1 million euros (21% for the first 50,000 euros of taxable base and 22% for the remainder, with progressive reductions starting in 2026 to reach 17% and 20%, respectively); for newly created entities that meet certain requirements and carry out economic activities (15% for the first tax period with a positive taxable base and the following one); for entities with a net turnover in the immediately preceding tax period of less than 10 million euros, subject to certain conditions (24% in 2025, with annual reductions down to 20% by 2028); and so on.For certain types of entities, minimum taxation is applied.

In corporate income tax, we will have to determine which income and which expenses are taxable and deductible, respectively, by the regulations in force at any given time and by the criteria established by the Directorate General for Taxation and other tax bodies of this nature.

The reviews and inspections by the tax administration are often done, so if in doubt, please consult us.

Aspects to bear in mind

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Document updated in January 2025

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*The information contained in this document does not constitute legal advice. It is provided for informational purposes only. The author accepts no liability for any consequences arising from its use.