Corporate Income Tax is crucial in the fiscal management of companies in Spain. It is a fundamental tax that is levied on the profits obtained by companies and other legal entities in this country. Given that the deadline for submitting the instalments for this tax is the 22nd of April, in this alert we will tell you about those aspects that it is essential to bear in mind in order to make a correct payment.
Particularities and accounting of Corporation Tax
Corporate Income Tax is regulated by Law 27/2014 (LIS) and its regulatory development is found in Royal Decree 634/2015 (RIS). Depending on the specific characteristics of each company or its type of activity, the regulation mentions different special regimes, such as that of civil companies with a commercial purpose, hydrocarbon companies, asset-holding companies or the special taxation regime for the affiliation of a professional team to a Sociedad Anónima Deportiva (SAD).
This allows a more appropriate and favourable tax approach for certain economic sectors or particular situations, which contributes to more efficient tax management and the promotion of certain business activities.
In the case of non-profit entities, they must account for corporate income tax expense in accordance with the standards set out in the General Accounting Plan and the General Accounting Plan for Small and Medium-sized Enterprises. In addition, they must take into account that tax deductions may vary and must be correctly reflected in the accounts.
Instalment payments and tax rates
In relation to instalments, if your company calculates its corporation tax payments on account according to the instalment system, the April payment on account requires 18% of the amount of the tax payable to be paid, based on the last tax return filed. This is done in box 599 of the return.
In turn, in the subsequent payments in October and December, the reference should be the tax liability for the year 2023.
On the other hand, if your company calculates the instalments according to the system of bases, there are different scenarios:
- It is essential to bear in mind that, generally, 17% of the taxable base obtained in the first three months of the current year, net of withholdings, must be paid.
- However, if the company’s turnover in 2023 was less than one million euros, the percentage is reduced to 16%.
- On the other hand, if the income exceeded ten million euros in the previous year, the applicable rate rises to 24%.
Ultimately, it is always essential to remember that, although the percentages may vary according to the system, in all cases it must be ensured that at least 23% of the accumulated accounting result has been paid. This ensures that a minimum tax payment is met, irrespective of the method used to calculate the instalments.
Corporate Income Tax is undoubtedly one of the most important taxes for companies, as it directly affects the profits obtained. In this regard, as with all tax procedures, prudence and knowledge are powerful allies.
At LEIALTA we provide the necessary support to fulfil these processes with confidence and precision. If you have any questions, do not hesitate to contact us.
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