Corporation tax in Spain
Clear and updated guide for businesses
The corporation tax in Spain (known locally as Impuesto de Sociedades) is the tax applied to company profits. In simple terms, most businesses in Spain pay a general rate of 25% on their net profits, although there are reduced rates and exceptions depending on the type and size of the company.
Have you recently set up a company in Spain, or are you considering it? One of the very first questions most entrepreneurs ask is: how much tax will my business need to pay? In SpainTax give you a clear, straightforward, and practical overview of corporation tax Spain: what it is, how much you need to pay, who is obliged to file, available deductions, and how to calculate it.
We're Here to Help You with Your Taxes
Please feel free to contact us using the form below. We will respond as soon as possible.
Corporation Tax Spain: Current rates
The general corporation tax rate in Spain is 25%. However, there are variations depending on your company’s circumstances:
- New companies: 15% for the first two years of profit (to support new businesses).
- Non-profit organizations: 10%.
- Special regimes: Some sectors (like oil and gas) or certain cooperatives have different rates.
This makes Spain’s corporation tax roughly in line with the European average, but planning is key to avoid paying more than necessary.
Who needs to pay corporation Tax in Spain?
All resident companies are subject to this tax. That means any business incorporated in Spain, regardless of where its profits are generated.
Non-resident companies with a permanent establishment in Spain must also pay on profits earned in the country.
Companies must file annually, even if they have not made profits. The Spanish Tax Agency (Agencia Tributaria) requires a declaration each fiscal year.
How to calculate corporation Tax in Spain
Calculating your tax is not as simple as multiplying your profits by 25%. The process involves:
- Start with accounting profit – the profit your company reports in its financial statements.
- Adjust for tax purposes – some expenses are not deductible (like fines or personal expenses).
- Apply deductions and allowances – R&D expenses, reinvestments, or certain double-taxation reliefs.
- Apply the relevant rate – usually 25%, or the reduced rate if your company qualifies.
That’s why many companies use a corporation tax calculator like ours at SpainTax. It allows you to instantly estimate your liability without diving deep into technical tax law.
Deductions and allowances
Spain offers certain deductions to encourage investment and innovation. Common examples include:
- R&D deductions: For expenses related to research and development.
- Reinvestment relief: If profits are reinvested into business activities.
- Double taxation relief: To avoid paying tax twice on the same income.
Each deduction comes with specific conditions, so consulting an expert is highly recommended.
Do small businesses need to pay?
Yes. Even small limited companies must file a corporation tax return, regardless of profit or turnover.
Can I file corporation tax on my own?
In theory, yes. But given the complexity of deductions and the risk of errors, most companies prefer professional support or a calculator tool.
How does Spain compare to other EU countries?
Spain’s 25% general rate is slightly lower than France (26.5%) but higher than Ireland (12.5%). It sits in the mid-range within the EU
Key takeaways about corportation tax
- The standard corporation tax rate in Spain is 25%.
- New companies enjoy a 15% reduced rate for the first two profitable years.
- All resident companies (and some non-residents) must file annually.
- Correct calculation involves adjustments, deductions, and compliance with deadlines.
OUR SERVICES
COMPREHENSIVE REAL ESTATE SERVICES
Experts in corporation tax in Spain
Understanding corporation tax Spain is essential to running a business smoothly and avoiding costly mistakes. While the system may seem straightforward at first glance, the reality is full of nuances: deadlines, deductions, and sector-specific rules.
If you want to make the process easier, try our corporation tax calculator at SpainTax. It gives you an instant estimate and helps you plan ahead. And if you’re unsure about the details, our experts in corporation taxes in Spain are here to guide you step by step.
CONTACT US