The year 2025 will bring important changes to corporate tax rates in Spain. These reforms seek to adapt to current economic needs and offer progressive tax incentives, especially for small and medium-sized enterprises (MICROPYMES), small entities (ERD) and start-ups.
The main changes and conditions are set out below.
Modification of Article 29 LIS and new transitional provision 44th
From 2025, although the reduction in tax rates will be progressive, a significant reduction will begin to affect various types of entities. These changes are designed to be implemented in a staggered manner, making it easier for companies to adapt.
General type
The general corporate tax rate will remain at 25%. However, entities classified as MICRO-SMEs (NTI of the immediately preceding tax period of less than €1 million) will benefit from reduced rates:
- For taxable income (BI) between 0 and 50,000 euros:
- 2025: 21%.
- 2026: 19%.
- From 2027: 17%.
- For taxable income above 50,000 euros:
- 2025: 22%.
- 2026: 21%.
- From 2027: 20%.
If the tax period is less than one year, the part of the BI taxed at the lower rate will be calculated proportionally to the days of the period or to the total amount of the BI if it is less than 50,000 euros.
Small entities (REE)
Entities that meet the requirements of Article 101 of the LIS (i.e. non-proprietorships and with a net taxable income for the immediately preceding tax period of less than 10 million euros) will be taxed according to the following progressive scheme:
- 2025: 24%.
- 2026: 23%.
- 2027: 22%.
- 2028: 21%.
- 2029: 20%.
In the case of consolidated groups, the 10 million limit also applies to the consolidated results of the group, as provided for in Article 42 of the Commercial Code.
In addition, DREs that reach an INCN of more than 10 million may continue to be considered as DREs for the three immediately following tax periods, provided that they have met the requirements in the previous two periods.
Newly created entities
Newly created entities that carry out economic activities (AAEE) will be taxed at 15% during their first tax period with a positive taxable base and the following one, unless they have to apply a lower rate. It is important to note that this reduction does not apply to entities whose assets are made up of more than 50% of securities or assets not assigned to AAEE.
Fiscally protected cooperatives
Tax-sheltered cooperative societies will benefit from a reduction of three percentage points in the general tax rate, without exceeding the limit of 20%, except for extra-cooperative results, which will be taxed at the general rate.
Credit cooperatives and rural banks will also see their cooperative results adjusted to the new progressive rates established in article 29.1 of the LIS.
Other corporate tax developments
Reduced Tax Rate of 23%
The reduced tax rate of 23% has been maintained for entities whose net turnover in the previous tax period is less than EUR 1 million. This continuity initiative seeks to continue promoting the development and competitiveness of small businesses. If you are not yet taking advantage of this tax benefit, it may be time to reconsider your tax strategy in the context of your financial planning.
Incentives for Electric Vehicle Investment
The drive for sustainability is a key pillar of the new fiscal policies. Incentives for investment in electric vehicles remain in place, allowing you to apply accelerated depreciation to this type of asset. If you have a fleet or are considering upgrading your business vehicles, this could be an attractive opportunity not only to reduce your environmental impact but also to optimise your taxes.
Minimum Taxation
The minimum taxation policy remains strict: entities with a turnover of at least EUR 20 million or subject to the special consolidation regime are required to be taxed on at least 15% of their adjusted taxable income. It is vital to review how these conditions affect your tax obligations to ensure you comply with the regulations smoothly.
Exceptions to the Minimum Liquid Quota
For certain entities, such as non-profit entities, collective investment companies, pension funds, and SOCIMIs, exceptions to the minimum net tax liability apply. These entities enjoy significantly lower tax rates, in some cases as low as 0%. A thorough understanding of these exemptions can facilitate optimal tax planning.
Presentation of Model 220
The filing of Form 220 is still a requirement for corporate groups, and from 2025 onwards, it is allowed to be filed using enabled software, thus simplifying the process and improving efficiency. Make sure you keep up to date with the right digital tools and certifications needed for smooth tax management.
Frequently asked questions
When is corporation tax due in 2025?
Corporate income tax is paid in two main stages:
- Payment in instalmentsDuring the tax year, companies make payments on account in April, October and December, in accordance with Article 40 of the Corporate Income Tax Act (LIS).
- Annual settlementThis is done by filing form 200 or 220 (in the case of consolidated groups) during the six months following the end of the financial year, normally before 25 July of the following year if the financial year coincides with the calendar year.
Which companies are taxed at 30%?
The 30% rate is applicable exclusively to certain specific entities, such as:
- Credit institutions and insurance companies, as stipulated in article 29.6 of the LIS.
- Companies engaged in the exploitation of hydrocarbons, regulated by article 29.8 of the LIS.
These companies have a different tax regime due to their specific nature or the strategic sectors in which they operate.
How much tax is a newly created SL taxed?
Newly created Limited Liability Companies (SL) that carry out economic activities (AAEE) are taxed at 15% in their first tax year with a positive taxable base and in the following year, provided that they do not have to apply a lower rate.
This benefit does not apply to:
Entities whose assets consist of more than 50% of securities or assets not used for economic activities.
When does 25% apply to corporate income tax?
The general rate of 25% applies to most companies, except those that qualify for reduced rates, such as:
- MICRO-SMEs, with a progressive reduction in their tax rate for the first 50,000 euros of taxable income.
- Newly created entities, taxed at 15% for the first two years.
- ERD (Entidades de reducida dimensión), with a progressive scheme that allows them to reduce the applicable rate year after year, until they reach 20% in 2029.
This rate is standard for companies without special regime or exemptions.
