What Corporate Tax is and who pays it
It is the direct tax levied on the income of companies: the taxable base is the profit calculated from the accounting result with the adjustments set by Law 27/2014. It is paid by all entities resident in Spain (the SL is the usual form, but also SA, cooperatives, foundations with economic activity) and by the permanent establishments in Spanish territory of non-resident entities.
The annual return is form 200, and throughout the year quarterly instalment payments are made with form 202. The applicable rate is that of the year in which the tax period begins, not that of the year in which the return is filed: a company whose financial year began in 2025 applies the 2025 rates even if it files in 2026.
Tax rates in 2026
Law 7/2024 of 20 December amended article 29.1 of the LIS and transitional provision 44 to reduce the rates for smaller companies gradually. The 2026 map is as follows:
Key points
- - General rate: 25% for entities with a net turnover (INCN) of 10 million euros or more, and for those not eligible for the reduced rates.
- - Small-sized companies (INCN between 1 and 10 million euros): 23% in 2026 (24% in 2025; it will fall to 22% in 2027, 21% in 2028 and 20% from 2029).
- - Micro-enterprises (INCN below 1 million euros): progressive scale of 19% on the first 50,000 euros of taxable base and 21% on the rest.
- - Newly created entities: 15% in the first financial year with a positive taxable base and in the following one.
- - Emerging companies under Law 28/2022 (startups): 15% until the fourth financial year with a positive base.
- - Tax-protected cooperatives: 20% on cooperative results; non-profit entities under Law 49/2002: 10%; Canary Islands Special Zone: 4%.
- - Asset-holding companies (more than 50% of assets in securities or not affected by economic activity): always 25%, with no access to the micro-enterprise scale.
How the tax liability is calculated
You start from the accounting result and apply the extra-accounting adjustments: exemptions, pending deductions, income imputations. On the taxable base you can apply the reduction for capitalisation reserve and offset negative taxable bases from previous years (maximum 70% of the base, except for newly created companies). The result is the taxable base, to which the rate is applied: that gives the gross tax liability, from which deductions are subtracted to arrive at the net tax liability.
Example using the micro-enterprise scale: a company with a taxable base of 120,000 euros pays 9,500 euros on the first 50,000 (19%) and 14,700 on the remaining 70,000 (21%), 24,200 euros in total. With the flat 25% rate of 2024 it would have paid 30,000: the scale saves 5,800 euros with no additional planning.
The capitalisation reserve
It is the most profitable deduction for a company that reinvests. Under Law 7/2024, the general percentage rose from 15% to 20% of the increase in equity for tax years beginning on or after 1 January 2025, and it can be higher if you create jobs: 23% if the average workforce grows between 2% and 5%, 26.5% between 5% and 10%, and 30% if it grows by more than 10%, in all three cases maintaining the workforce for three years.
It has limits: the reduction cannot exceed 20% of the positive taxable base for the period (25% if net turnover is below 1 million euros). And it requires an accounting counterpart: an unavailable reserve must be recorded in the balance sheet for the amount of the reduction, or the incentive is lost.
Main deductions
The most widely used is the R&D deduction: 25% of research and development expenses and 12% of technological innovation expenses, with an additional 42% on the excess over the average of the two previous tax years. There is also a deduction for job creation of 9,000 euros per person-year for the increase in the workforce of workers with disabilities (article 38 of the LIS).
Deductions are reviewed with the documentation in order: activity report, allocation of expenses and, in the case of R&D, the reasoned report if requested. A poorly substantiated deduction is a regularisation with surcharges waiting to happen.
Calendar: forms 202 and 200
The instalment payments on form 202 are filed in April, October and December. Under the quota method, 18% of the gross tax due for the last closed tax year is paid; the base method, which calculates on the base for the current period, is mandatory for entities with net turnover above 6 million euros.
The annual return (form 200) is filed within the 25 calendar days following the six months after the end of the tax year: for the calendar year, in July. Failure to make instalment payments carries surcharges, and filing form 200 late carries a penalty of 5% to 20% of the tax due depending on the delay.
