Corporation Tax in Spain: All you should know

If you want to know how the Corporation Tax, also called Corporate Income Tax, this is your article. We will explain who should fill in it and how to guide you in this process and avoid headaches.

What is Corporation Tax?

A Corporation Tax is a personal and direct tax levied on the profit obtained by companies and legal entities residing in Spanish territory. The points of determination of the tax base and the amount to be paid are based on the worldwide income and the accounting profit of the company. This amount is adjusted attending the tax law.

Table of Tax rates in Spain

General rate: 25%
Reduced rate for entrepreneurs: 15%
Reduced rate for tax protected cooperatives: 20%
Reduced rate for partially exempt entities: 25%
Reduced rate for associations (of public utility) and foundations: 10%
Reduced rate for investment companies: 1%
Type reduced ZEC entities: 4%
Reduced rate for other entities: 25%
Type of banks and credit institutions: 30%

How to submit the Corporate Tax in Spain?

The forms that you must submit in Spain are:

  • Form 200: Annual Corporation Tax Return. It must be submitted every July in case the financial year of the companies coincides with the calendar year. It is always submitted during the 25 days following the 6 months from the financial closing date.
  • Form 202: Pre-payments of the Corporation Tax. It must be submitted when you have profit in the Form 200 (or in any case of big companies). It is submitted in October, December and April.
  • Form 220: Tax form applicable to groups of companies.
    All these models must be submitted through the Internet.

How is the tax base and the corporation tax calculated

As we said before, it is calculated attending the accounting profit or loss of the company, that is, the difference between the incomes and the expenses obtained in the year.
However, this accounting profit/loss has to be adjusted attending the differences established by the Corporate Tax Law. These differences can be due because of qualification, valuation or imputation rules, and can be negative or positive and temporary or permanent.
The calculations and the filling of the corporate income tax in Spain is something difficult because of the differences between the accountancy and the tax rules and because is based on a well done accountancy. If you need advice, we encourage you to contact GM Tax. We will study your case in a particular way and find the best solutions together.