Corporate Income Tax in Spain

In Spain is the corporate tax levied on companies established in Spain (resident taxpayers). Resident legal entities must pay tax taking into account all of their worldwide income. Non-residents are subject to taxation for this tax solely for the income accrued or paid on Spanish territory. In general accounting principles coincide with corporate tax principles, very little, non-accounting adjustments must be made. 

Taxable period and tax base
In Spain is taxable period the calendar year, the tax year ends also on December 31. The basis of taxation is the income earned by the corporation during the calendar year. The tax due day is the last day of the tax year. Payment is made through three installments, with a subsequent final settlement by means of a return to be filed within 25 calendar day of the end of the sic months following the relevant tax period.

Tax rate
The taxable income is equal to the difference between gross profit and costs and deductible expenses. The gross operating profit is made by the difference between sales and costs.
• In 2008 is the standard corporate tax in Spain 30 % (in 2007 was 32.5 %)
• For the small company with profit up to 120 202 EUR the tax rate is 25 %
• For foundations and public associations with special tax arrangements by law 10 %

Exemption
Exemptions may be either automatic or dependent on fulfilling objective criteria. Automatic exemptions include:
o Complete exemptions for the central government, the autonomous communities, certain public bodies, the Bank of Spain
o Partial exemptions in respect of certain types of income accruing to political parties, trade unions…

Deductions
In Spain are these deductions by law, for instance:
• for research and development work – to 30 % of the relevant expenditure
• for fostering technological innovation activities – to 15 % of the relevant expenditure
• for exporting – to 25 % of foreign investments
• for fostering the use of the new ICT – to 10 % of the relevant expenditure
• 10 % of the company contributions to Pension Plans
• …
All deductions may not exceed 35 % of the full tax liability less the deductions allowed to avoid domestic and international double taxation and any applicable allowances.

Bc. Petr Gola