Are you planning to set up a company and want to understand how it will be taxed? One of the main taxes you will need to manage is Corporate Income Tax, known in Spain as Impuesto sobre Sociedades or IS.
This tax applies to income earned by companies and other entities that are tax resident in Spain. Therefore, if you are considering setting up a company or already operate one, it is important to understand how this tax works, when it must be filed, which forms are required and which factors may affect the final tax liability.
In this article, we explain what Corporate Income Tax is, which companies it affects, how it is calculated, which tax rates apply, when it must be filed and what companies should review to comply correctly with Spanish tax regulations.
What is Corporate Income Tax?
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Corporate Income Tax is a direct tax on income earned by companies and other legal entities that are tax resident in Spain.
Unlike Personal Income Tax, which applies to individuals, Corporate Income Tax applies to entities such as limited liability companies, public limited companies, cooperatives, associations, foundations and other organisations that earn income through their activities.
Generally, the tax applies to commercial companies and other entities operating in Spain when they are considered tax resident in Spanish territory.
For an entity to be considered tax resident in Spain, it must meet at least one of the following criteria:
- It has been incorporated under Spanish law.
- Its registered office is in Spain.
- Its effective place of management is in Spain.
Therefore, a company incorporated in Spain, with its registered office in Spain or effectively managed from Spain will be subject to Corporate Income Tax on its worldwide income, regardless of where that income was generated.
Which companies and entities are subject to Corporate Income Tax?
Corporate Income Tax mainly applies to companies and entities that are tax resident in Spain.
Entities that may be subject to the tax include:
- Limited liability companies.
- Public limited companies.
- Worker-owned companies.
- Associations and foundations.
- Non-profit entities, subject to the specific rules of their tax regime.
- Holding companies.
- Asset-holding companies.
- Economic interest groupings and temporary business associations, subject to their specific rules.
- Partially exempt entities, in the cases provided for by Spanish tax legislation.
It is also important to remember that inactive companies may still have Corporate Income Tax obligations. Even if they do not carry out an economic activity, the obligation to file Form 200 does not automatically disappear.
For non-resident entities operating in Spain, it is necessary to determine whether they have a permanent establishment, and which tax obligations arise. In these cases, taxation may fall under Non-Resident Income Tax, although some of the applicable rules may be like those governing Corporate Income Tax.
For this reason, before starting business activity in Spain, companies should carefully review their corporate structure, tax residence and the tax obligations arising from their operations.
How is Corporate Income Tax calculated?
Corporate Income Tax is not calculated simply by applying a percentage to the company’s accounting profit. Although the accounting result is the starting point, Spanish tax legislation requires certain adjustments to determine the taxable base.
In simplified terms, the calculation follows this process:
- Company accounting result.
- Positive or negative tax adjustments.
- Offset of tax losses, where applicable.
- Determination of the taxable base.
- Application of the corresponding tax rate.
- Calculation of the gross tax liability.
- Application of tax credits, deductions and instalment payments.
- Determination of the final amount payable or refundable.
As a result, a company’s accounting profit and its taxable base may be different. This is because certain expenses may not be tax deductible, some income may receive specific tax treatment, and certain transactions may require off-book tax adjustments.
Some of the factors that may affect the Corporate Income Tax calculation include:
- Non-deductible expenses.
- Accounting and tax depreciation.
- Impairments and provisions.
- Related-party transactions.
- Offset of tax losses.
- Capitalisation reserve.
- Tax deductions.
- Applicable tax credits.
- Instalment payments made during the financial year.
For this reason, the company’s accounting and tax year-end closing is a key stage. A proper review can help identify errors, apply available tax incentives and reduce risks in the event of a review by the Spanish Tax Agency.
What Corporate Income Tax rates apply?
Corporate Income Tax includes several tax rates depending on the type of entity, turnover, tax position and applicable regime.
The general Corporate Income Tax rate is 25%. However, reduced and special rates may apply in certain circumstances.
Below are some of the main rates applicable to tax periods beginning in 2026:
| Type of entity | Applicable rate | Comment |
|---|---|---|
| General rate | 25% | Generally applicable to companies and entities subject to Corporate Income Tax. |
| Micro-enterprises with net turnover below €1 million | 19% on the first €50,000 of taxable base and 21% on the remainder | Applicable requirements and limits must be reviewed. |
| Small companies qualifying under the reduced-size entity regime | 23% | Applies to entities that meet the requirements of this specific regime. |
| Newly incorporated companies | 15% | Applies during the first tax period with a positive taxable base and the following period, provided the requirements are met and the company is not an asset-holding entity. |
| Start-ups | 15% | Applies when the specific requirements established for these companies are met. |
| Asset-holding entities | 25% | They cannot apply the reduced rate for newly incorporated companies. |
| Tax-protected cooperatives | 20% on cooperative results, subject to specific rules | Specific rules apply depending on the type of income and cooperative. |
| Credit institutions and certain companies in the hydrocarbons sector | 30% | Special rate applicable to certain entities. |
This table includes some of the most common rates, but not every possible situation. Other special rates apply to specific entities, including organisations governed by Spanish Law 49/2002, SOCIMIs, pension funds, entities in the Canary Islands Special Zone (ZEC) and collective investment institutions.
Therefore, before applying a reduced or special rate, companies should review their specific circumstances, turnover, activity, tax regime and the applicable requirements.
When is Corporate Income Tax filed?
Corporate Income Tax is filed using Form 200.
As a rule, the return must be filed within the 25 calendar days following the six months after the end of the tax period.
In practice, when the company’s financial year coincides with the calendar year, from 1 January to 31 December, the usual filing period is between 1 and 25 July of the following year. However, if the final day falls on a non-working day, the deadline may be extended to the next working day.
For example, if a company closes its financial year on 31 December, it will normally file its Corporate Income Tax return in July of the following year.
If the company has a financial year that differs from the calendar year, the filing deadline is calculated according to the specific closing date of its tax period.
Which forms are used for Corporate Income Tax?
To comply correctly with Corporate Income Tax obligations in Spain, companies should be familiar with the main tax forms associated with this tax.
| Form | Purpose | Filing deadline |
|---|---|---|
| Form 200 | Annual Corporate Income Tax return. It includes the taxable result, adjustments, deductions, tax credits, instalment payments and final tax liability. | Within the 25 calendar days following the six months after the end of the tax period. |
| Form 202 | Corporate Income Tax instalment payment. It allows companies to make advance payments towards the annual tax liability. | During the first 20 calendar days of April, October and December. |
| Form 220 | Corporate Income Tax return for tax groups applying the tax consolidation regime. | Within the filing period applicable to the tax group under the relevant regulations. |
The main Corporate Income Tax return is Form 200. Entities subject to the tax must generally file it even if they report a loss or no tax is payable, except in specific exemption or filing-relief cases provided for by Spanish legislation.
Form 202, on the other hand, is used to make instalment payments towards Corporate Income Tax during the financial year. These payments are subsequently deducted from the annual tax liability.
Meanwhile, Form 220 applies to tax groups using the tax consolidation regime. In these cases, tax is calculated on an aggregated basis for the group, subject to the specific rules of the consolidation regime.
Deductions, tax credits and incentives under Corporate Income Tax
One way to optimise Corporate Income Tax is to properly review the deductions, tax credits and incentives that may apply.
However, these tax benefits should not be applied automatically. Companies must verify the requirements, limits, supporting documentation and compatibility with other incentives.
Some of the most relevant incentives include:
R&D and innovation incentives
Companies carrying out research, development and technological innovation activities may benefit from significant tax deductions, provided that the projects, expenditure and applicable requirements are properly documented.
Incentives for film and audiovisual productions
Certain film productions, audiovisual series and live performances may generate specific Corporate Income Tax deductions.
Employment-related deductions
Certain recruitment decisions may give rise to tax deductions, such as employing people with disabilities, provided that the statutory requirements are met.
Capitalisation reserve
The capitalisation reserve may allow companies to reduce their taxable base when they increase their equity and meet the requirements established by Spanish tax legislation.
Accelerated and unrestricted depreciation
In certain circumstances, some companies may benefit from tax incentives linked to depreciation of their assets, including accelerated depreciation or unrestricted depreciation.
Specific tax credits
Other tax credits may also apply in specific cases, such as certain income obtained in Ceuta and Melilla, local public services or other situations established by law.
Before applying any deduction, tax credit or incentive, companies should verify that all requirements are met and that sufficient supporting documentation is available in case of a review by the Spanish Tax Agency.
Common mistakes when preparing Corporate Income Tax
Corporate Income Tax is one of the most important tax obligations for companies operating in Spain. Therefore, it is important to avoid errors that could lead to penalties, tax adjustments or missed tax opportunities.
Some common mistakes include:
- Confusing accounting profit with the taxable base.
- Applying a reduced tax rate without checking the requirements.
- Failing to determine whether the company qualifies as an asset-holding entity.
- Failing to review non-deductible expenses correctly.
- Overlooking off-book tax adjustments.
- Failing to offset tax losses when applicable.
- Applying tax deductions without sufficient supporting documentation.
- Failing to review instalment payments already made.
- Filing Form 200 after the deadline.
- Failing to coordinate the accounting close with the tax review.
- Failing to review related-party transactions or transfer pricing.
- Failing to analyse the tax impact of significant corporate transactions.
These errors can often be avoided through appropriate tax planning and coordination between the company’s accounting, tax and corporate teams.
Preguntas frecuentes sobre el Impuesto sobre Sociedades
What does Corporate Income Tax apply to?
Corporate Income Tax applies to income earned by companies and other entities that are tax resident in Spain during a tax period.
Who must file Corporate Income Tax?
As a general rule, entities subject to the tax must file it. These include limited liability companies, public limited companies, cooperatives, associations, foundations and other entities that are tax resident in Spain.
Does an inactive company have to file Form 200?
Yes. An inactive company may still be required to file Form 200 even if it has not carried out any business activity. Inactivity does not automatically remove its tax obligations.
What is the general Corporate Income Tax rate?
The general Corporate Income Tax rate is 25%, although reduced and special rates may apply to certain types of entities.
When is Form 200 filed?
Form 200 must be filed within the 25 calendar days following the six months after the end of the tax period. If the financial year coincides with the calendar year, the usual filing period is in July.
What is the difference between Form 200 and Form 202?
Form 200 is the annual Corporate Income Tax return. Form 202 is used to make instalment payments towards the tax during the financial year.
What is the Corporate Income Tax taxable base?
The taxable base is the amount to which the applicable tax rate is applied. It is calculated from the accounting result after making the corresponding tax adjustments.
Can companies reduce their tax liability through deductions and tax credits?
Yes, but only when the company meets the legal requirements and has sufficient supporting documentation. Deductions and tax credits should not be applied automatically.
Discover LEIALTA’s tax advisory services
Companies evolve and grow, and their tax advisory needs change with them. For this reason, Corporate Income Tax should not be managed solely as an annual compliance obligation. It should also form part of the company’s broader tax and accounting planning.
At LEIALTA, we have a specialist tax advisory and tax consulting team for companies operating in Spain. Our approach combines regulatory compliance, accounting review, tax planning and strategic analysis of business transactions.
Specialist advice can help companies comply correctly with Spanish tax regulations, avoid penalties and identify tax opportunities within the applicable legal framework.
