Company details
📊 Corporate Tax breakdown
Spain’s Corporate Tax (Impuesto sobre Sociedades — IS) taxes the income earned by companies and other legal entities resident in Spain. It is governed by Law 27/2014 of 27 November and applied to the accounting profit for the fiscal year, adjusted for specific fiscal differences to arrive at the taxable base. The standard rate is 25%, with a reduced rate of 15% for newly formed companies during their first two profitable fiscal years, and 10% for non-profit entities under Law 49/2002. For 2026, the State Budget has maintained the main rate structure while introducing some updates to R&D deductions and accelerated depreciation for SMEs. A key decision point for sole traders (autónomos) with profits above €60,000 is assessing whether incorporating and paying Corporate Tax at 25% is more tax-efficient than the progressive IRPF, which can reach 47% at the top.
🔍 How is Corporate Tax calculated?
The process follows three stages:
- Taxable base: Accounting profit adjusted for permanent and temporary differences under the LIS (non-deductible expenses, depreciation adjustments, provisions).
- Gross quota: Taxable base × applicable tax rate.
- Net quota: Gross quota minus deductions (R&D, double taxation relief, depressed zone investments) minus advance payments already made.
📊 Corporate Tax rates 2026
| Entity type | Tax rate | Condition |
|---|---|---|
| Standard regime | 25% | All Ltd and PLC companies without special regime |
| New company | 15% | First 2 fiscal years with positive taxable base |
| SMEs | 25%* | No separate SME rate since 2015 |
| Protected cooperatives | 20% | Cooperatives qualifying under Law 20/1990 |
| Non-profit entities | 10% | Under Law 49/2002 regime |
| Credit institutions / Hydrocarbons | 30% | Special regime |
*SMEs no longer have a different rate since 2015. The new company rate (15%) is the main fiscal incentive for recently formed entities.
📈 When is Corporate Tax more efficient than sole trader IRPF?
| Annual profit | IRPF sole trader (marginal rate) | IS (standard rate) |
|---|---|---|
| €30,000 | ~30% | 25% → minimal saving |
| €60,000 | ~37% | 25% → saving approx. €7,200 |
| €100,000 | ~45% | 25% → saving approx. €20,000 |
| €200,000 | ~47% | 25% → saving approx. €44,000 |
The saving is not automatic. Profits retained in the company pay IS, but when distributed as dividends they trigger additional IRPF at 19%–28%. The optimal structure depends on whether profits are reinvested or withdrawn.
📝 Worked examples
Example 1: Standard Ltd company — €150,000 profit
Profile: Ágora Consulting S.L., a consultancy with €150,000 pre-tax profit in 2026. Standard regime, no R&D deductions.
- Accounting profit: €150,000
- Fiscal adjustments: €0 (assumed)
- Taxable base: €150,000
- Standard rate: 25%
- Gross quota: €37,500
- Deductions: €0
- Total Corporate Tax due: €37,500
- Effective rate: 25.0%
Example 2: New company — €80,000 profit
Profile: TechStart S.L., a technology company founded in 2025 with its first profitable fiscal year. Profit: €80,000.
- Taxable base: €80,000
- New company rate (15%): applicable (first profitable year)
- Corporate Tax due: €12,000
- Saving versus standard rate: €8,000
- Effective rate: 15.0%
⚠️ Common mistakes
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Confusing accounting profit with taxable base: Fines, personal IRPF of directors, and expenses unrelated to the business are non-deductible even if correctly recorded in the accounts.
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Not applying the new company rate in early years: The 15% applies to the first two fiscal years with a positive taxable base, not the first two calendar years from incorporation. If the first year shows a loss, the count starts with the first profitable year.
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Calculating IS on cash in the bank: IS is assessed on accrued accounting profit, not cash received. A company may owe IS even if its customer invoices remain unpaid at year-end.
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Missing instalment payment deadlines (Form 202): Companies with an annual quota above €6,000 must make three advance payments in April, October, and December. Failure to do so triggers surcharges of 5%–20%.
❓ Frequently Asked Questions (FAQ)
Most companies (Ltd, PLC) pay the standard rate of **25%** on their taxable base. Companies in their first or second profitable year pay **15%**. Cooperatives qualifying under Law 20/1990 pay **20%**, and non-profit entities under Law 49/2002 pay **10%**. Unlike income tax, there are no progressive brackets: the rate applies to the full taxable base. Credit institutions and hydrocarbon companies pay a special rate of **30%**.
In purely fiscal terms, above **€60,000 annual profit**, Corporate Tax at 25% is typically more efficient than the progressive IRPF rate (37%–47% at those income levels). However, the real advantage depends on whether you retain profits in the company or withdraw them: retained profits pay IS at 25%, but withdrawals as dividends incur additional IRPF at 19%–28%. Professional accounting costs, minimum social security contributions for director-shareholders, and incorporation costs must also be factored in.
Deductible expenses include: salaries and social contributions, office rent, utilities, depreciation of fixed assets, insurance, professional services (accountants, lawyers), and entertainment costs up to **1% of net turnover**. Non-deductible items include: fines and penalties, non-qualifying donations, the IS itself, personal expenses of directors, and remuneration to shareholders without a proper employment contract.
Form 200 must be filed within **25 calendar days following 6 months after the end of the fiscal year**. For companies with a standard calendar year (1 Jan–31 Dec), the deadline is between **1 and 25 July** of the following year. Late filing triggers surcharges of 5% (up to 3 months late), 10% (3–6 months), 15% (6–12 months), or 20% (over 12 months), plus interest.
Yes. Negative taxable bases can be offset against future positive bases **without any time limit** (the previous 18-year limit was abolished). The quantitative limit is **70%** of the current year's positive taxable base (or 100% for bases under €1 million). Any remaining loss carries forward to future years indefinitely.
Companies whose annual IS quota exceeded **€6,000** in the prior year must make three advance payments via **Form 202**: in the first 20 days of **April, October, and December**. Each instalment equals 18% of the gross quota from the most recent IS return. If the final annual return shows a lower tax than the instalments paid, the difference is refunded. If it shows more, the remainder is paid with Form 200.