30/04/2025.- Spain’s Corporate income tax rates have been amended recently. Being aware of the right tax rate is, with no doubt, a key element. While the general corproate tax rate (CIT) in Spain is 25% (companies are taxed on their worldwide income), other tax rates may apply, depending on the type of company that is taxed and its type of business (for instance corporate tax rates in Spain for banks and financial institutions is 30%).
Small and medium size entities (SMEs)
With effect for tax periods starting on or after 1 January 2025, SMEs (companies with less than 10 million Euros annual income) will benefit form a reduction in Spain’s Corporate income tax rates. Such a reduction will be implemented progressively over a period of five years. Thus, for medium sized companies (less than 10 million Euros annual income) the tax rate is 24% in 2025, reducing by one percent ever year down to 20% to 2029.
Micro-enterprises companies
In the case of micro-enterprises (those with a net turnover in the previous tax period of less than EUR 1 million) implementation will be carried out progressively over a period of three years .
Moreover, in the case of micro-enterprises, the tax rate is broken down into two brackets, with a lower rate being levied on the taxable income up to EUR 50,000, when the tax period is one year, or up to the corresponding proportional amount, when the tax period is shorter. Specifically, the tax rates will be as follows:
2025 2026 2027
Taxable income up to EUR 50,000 21% 19% 17%
Excess 22% 21% 20%
That said, readers must be aware that for corporate groups, the turnover of all group companies must be considered for this purpose.
Corporate Income Tax Rate for Newly created companies
Newly created companies are taxed at a 15% tax rate for both the first tax period in which they obtain a profit and the following one.
Notwithstanding the above, equity companies (i.e. companies that do not carry on business activity) or newly created companies that are part of a bigger group may not be able to benefit from this reduced tax rate.
For any further information, do not hesitate to contact our tax experts at 4|5|3 Law Firm.
By Gerard Luna (gluna@453legal.com)
