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Corporate Tax in Spain

Corporate Tax in Spain

Updated on Monday 28th August 2017

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One of the most important taxes which have to be paid by the local and the foreign investors who open companies in Spain is the corporate tax that is applied on the federal level. There are also other less important taxes that are levied by the regional authorities in this country, so a foreign entrepreneur should be aware on the requirements of these two levels of taxation – at the federal and at the regional level. Our team of lawyers in Spain can offer in-depth advice on the corporate taxes applicable to all commercial companies operating in this country; at the same time, businessmen can receive assistance on the manner in which such taxes have to be paid. 
 

Standard corporate tax in Spain  

 
The good news for both local and foreign companies operating in Spain is that the rate at which the corporate tax is imposed on the company’s income decreased in 2015, from 30% to 28%, and a further decrease was applied in 2016, when the corporate tax was established at 25%
 
The rate was even higher in 2005 when it reached 35% and three years later it decreased to 30%. The decrease is a sign that the Spanish authorities want to encourage the business environment in this country, that was strongly affected by the financial crisis. However, at the moment, numerous aspects show that the policies imposed by the local authorities had positive effects, including on the level of employment.  
 
This tax is applied to all companies registered in Spain and it is calculated on the net income obtained from the economic activity during a business year. The corporate tax represents an important source of income for the public budget of Spanish authorities
 
An important aspect related to the taxation of Spanish businesses is that the newly registered companies may benefit from a lower corporate tax (imposed at the rate of 15%), in the situation in which they were registered after 1st of January 2015. Our team of Spanish lawyers can offer more details on other requirements available for this particular case. 
 

Different rates for certain types of Spanish companies

 
The reduced rates applied for small companies were eliminated starting  with 2015, when the new rate came into force. The Spanish authorities decided to allow a transitory period during 2015, when the corporate tax for small and medium-sized companies was of 25%
 
The investors are encouraged to open companies in Spain because they will have to pay a reduced corporate tax in the first two years in which they obtain a taxable profit. As mentioned above, the reduced corporate tax for newly formed companies can be imposed at the rate of 15%, for a tax base below EUR 300,000. The reduced tax is available for the first two taxable years of economic activity. Any amount above EUR 300,000 will be imposed with a corporate tax rate of 20% (for the same period of time). 
 
Investors who  need to find out more about the corporate tax applicable in Spain are invited to contact our law firm in Spain. Our Spanish attorneys will offer information about the taxation system in this country and legal assistance for any other topic related to the economic activity of company registered here. 
 

Comments

  • Carlos 2017-08-25

    Hello, I would like to know how to register for corporate taxation. I will soon open a small company in Madrid.

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