How companies pay the Spanish corporate income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

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1. The Corporate Income Tax taxes the income of companies and other legal entities resident in Spain, and applies throughout Spanish territory, without prejudice to the regional tax regimes of the Basque Country and Navarre.
2. The general tax rate drops to 25%. Newly created entities pay 15% in the first two periods with positive taxable income, while credit institutions and hydrocarbon companies pay 30%.
3. The taxable base is calculated from the accounting result, adjusted under the law. Income and expenses are recorded in the period in which they accrue, regardless of when they are collected or paid.
4. The deduction of financial expenses is capped at 30% of operating profit, with a minimum deductible amount of €1 million, and fines, donations and returns on equity are not deductible.
5. Dividends and gains from selling significant stakes (at least 5% of capital or a value above €20 million) are exempt, both for Spanish and foreign entities taxed at a nominal rate of at least 10%.
6. Negative taxable bases can be offset without a time limit, but capped at 70% of the year's taxable base, with a minimum offsettable amount of €1 million.
7. Deductions for research, development and technological innovation are kept (25% of expenses, 42% on the excess, and 8% of investments), along with job creation deductions, including €9,000 or €12,000 per worker with a disability.
8. Small and medium-sized companies (net turnover below €10 million) get incentives such as free depreciation linked to job creation and a leveling reserve that allows reducing the taxable base by up to 10%.

Who it affects

• Companies and entities resident in Spain: They are taxpayers and pay tax on all their income, at the general 25% rate.
• Small and medium-sized businesses: They enjoy special incentives if their net turnover does not exceed €10 million.
• Companies that research or innovate: They can apply tax credits for their R&D and innovation expenses and investments.
• Nonprofits, cooperatives and partially exempt entities: They have reduced rates or special regimes under other specific laws.
• Groups of companies: They can opt for the fiscal consolidation regime and pay tax as a single fiscal group.

Words worth knowing

Base imponible (taxable base)

The amount on which the tax is calculated: the income earned by the company in the fiscal year.

Tipo de gravamen (tax rate)

The percentage applied to the taxable base to calculate what must be paid.

Cuota íntegra (gross tax liability)

The result of applying the tax rate to the taxable base, before any credits.

Amortización (depreciation)

Annual deduction of the value lost through use of company assets, such as machinery or buildings.

Consolidación fiscal (fiscal consolidation)

A regime that allows a group of companies to pay tax as a single entity, adding results and offsetting losses among them.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries