Spain Corporate Tax Guide 2026 — Impuesto sobre Sociedades (25%)

Overview

• Governing law: The Impuesto sobre Sociedades is governed by Law 27/2014 (Ley del Impuesto sobre Sociedades) and administered by the Agencia Tributaria (AEAT). It applies to all companies and legal entities resident in Spain. A company is considered resident in Spain if it is incorporated under Spanish law, has its registered office in Spain, or has its place of effective management in Spain.
• Taxable persons: All legal entities resident in Spain are subject to IS on their worldwide income, unless a specific exemption applies. Non-resident entities with a permanent establishment (PE) in Spain are taxed on income attributable to the PE under the Non-Resident Income Tax (IRNR).
• Tax year: The tax year coincides with the company's financial year and cannot exceed 12 months. The return must be filed within 25 days of the 6-month period following the end of the tax year (i.e., by 25 July for calendar-year companies).

Corporate Tax Rates 2026

• General rate — 25%: The standard corporate tax rate in Spain is 25% on taxable profit. This rate applies to most companies, including SLs (Sociedades Limitadas) and SAs (Sociedades Anónimas).
• New companies — 15%: Newly incorporated companies benefit from a 15% rate on the first €300,000 of taxable profit in the first 2 years of activity (the first tax year in which they generate positive taxable income and the following year). Profit above €300,000 is taxed at the standard 25% rate. The reduced rate applies only to companies that are de facto carrying on an economic activity and have share capital fully paid up.
• Special rates: (a) Mutual guarantee companies (Sociedades de Garantía Recíproca): 10%. (b) Certain associative foundations and non-profit entities: 10% (if they qualify for the Ley de Mecenazgo regime). (c) Collective investment institutions (IICs): 1% (for certain regulated funds). (d) Pension funds: 0% (income is exempt). (e) Credit institutions and hydrocarbons companies: 25% general rate (but may have additional surcharges).
• Reduced rates for SMEs: Spanish law historically provided a progressive scale for small businesses (tipo de gravamen reducido for microempresas and SMEs with net turnover under €1 million), but this regime was largely phased out. As of 2026, the general 25% rate applies to all, with the new-company 15% rate as the primary relief mechanism.

Taxable Income

• Resultado contable: The starting point for calculating taxable income is the accounting profit (resultado contable) determined under Spanish GAAP (Plan General de Contabilidad — PGC). The accounting profit is then adjusted for permanent and temporary differences between accounting treatment and tax treatment.
• Permanent differences: Items that affect accounting profit but not taxable profit (or vice versa) and do not reverse in future periods. Examples: fines and penalties (non-deductible), donations (partially deductible), certain provisions (non-deductible), income from participations exempt via the participation exemption (non-taxable).
• Temporary differences: Items that affect taxable profit in a different period than accounting profit. These generate deferred tax assets (IT bi — impairment of assets deductible in future periods) or deferred tax liabilities.

Deductions

• Depreciation (amortización): Tangible and intangible fixed assets are depreciable. The maximum annual depreciation rates are set by law (e.g., buildings: 3%–5% per year, plant and machinery: 10%–12% per year, furniture and fixtures: 10% per year, computer equipment: 25% per year). The straight-line method is most common, but the declining-balance method is available for certain assets.
• R&D and innovation: R&D expenses can be deducted at 100% in the year incurred or amortised over up to 10 years. The R&D tax credit (see below) is separate from the expense deduction.
• Financial expenses: Net financial expenses (interest expense minus interest income) are deductible up to 30% of EBITDA. Interest in excess of this limit can be carried forward indefinitely. There is a minimum deductible amount of €1 million per year regardless of the EBITDA limit.
• Provisions: Certain provisions are deductible: (a) provisions for bad debts (debts overdue by 6+ months or with insolvency proceedings), (b) provisions for depreciation of inventories (subject to valuation rules), (c) provisions for employee benefits. General risk provisions are generally not deductible.

Tax Credits

• R&D Tax Credit (I+D+i): One of the most attractive tax incentives in Spain: (a) 25% of qualifying R&D expenses (42% if the amount exceeds the average of the prior 2 years), (b) 12% of innovation expenses (for technological development). The credit is subject to limits: 45% of the gross tax liability (or 60% if the R&D expense exceeds 10% of turnover). Unused credits can be carried forward for up to 15 years.
• Employment credits: Tax credits for job creation: (a) €3,000 per year for each full-time employee hired with a permanent contract for 2+ years (for SMEs and certain social integration companies), (b) regional incentives for hiring in certain zones (Ceuta, Melilla, etc.).
• Export promotion: Credits for activities promoting exports: participation in international fairs and exhibitions, market studies, and opening foreign branches may qualify, though the general regime has been progressively phased out in favour of direct grants.

Participation Exemption

• Dividend exemption: Dividends received from a subsidiary are 100% exempt if the parent company holds at least 5% (or an acquisition value of €20 million) and the participation has been held for at least 1 year. The subsidiary must be subject to a similar corporate tax (not a tax-exempt entity, and not a passive holding company).
• Capital gains exemption: Capital gains on the sale of shares in a subsidiary are 100% exempt under the same conditions (5% holding, 1-year holding period, similar tax requirements). This makes Spain highly competitive for holding companies.

Filing and Payment

• Modelo 200: The annual corporate tax return is filed using Modelo 200. For calendar-year companies, the deadline is 25 July of the following year (within 25 days of 6 months after the tax year end). The return must be filed electronically via the AEAT website.
• Instalment payments (Pagos Fraccionados): Companies must make three advance payments each year in April, October, and December (during the tax year). The instalments are calculated as 18% of the tax base of the prior year (with adjustments) or, for large companies (turnover >€6 million), 60% of the actual profit of the current year instalment period.
• Tax group: Groups of companies with at least 75% ownership (50% for listed companies) can opt for the consolidated tax regime (Régimen de Consolidación Fiscal). The group files a single Modelo 200 covering all group members. The tax consolidation regime allows profits and losses of group companies to be offset against each other.

FAQ

What is the difference between IS and IRPF for business activities?

IS (Impuesto sobre Sociedades) applies to companies and legal entities. IRPF applies to individuals, including self-employed professionals (autónomos) carrying on business activities as sole traders. If you operate as a sole trader, your business income is taxed under IRPF at progressive rates (19–47%). If you incorporate a company (SL or SA), the company pays IS at 25% (or 15% for new companies) on its profits, and dividends distributed to shareholders are taxed again under the savings tax base of IRPF (19–28%).

Can losses be carried forward?

Yes, tax losses (bases imponibles negativas) can be carried forward indefinitely (since 2015). However, the offset is capped at 70% of the taxable profit of the year (with a minimum of €1 million of profit that can be offset per year, regardless of the 70% limit). Losses incurred before 2015 are subject to the previous 15-year carry-forward limit.

Is Spain a good jurisdiction for holding companies?

Yes, Spain has a very favourable participation exemption regime that exempts 100% of dividends and capital gains from qualifying shareholdings (≥5% held for 1 year). Combined with the absence of withholding tax on dividends paid to EU corporate shareholders (under the EU Parent-Subsidiary Directive) and a wide network of double tax treaties, Spain is an attractive jurisdiction for holding companies, particularly for Latin American investments.

What are the transfer pricing rules?

Spain has comprehensive transfer pricing rules based on the OECD Transfer Pricing Guidelines. Related-party transactions must be documented at arm's length. Companies must prepare transfer pricing documentation (the documentation of the group — master file, and the local file — documentation específica del contribuyente) if turnover exceeds €45 million. Penalties for non-compliance range from 15% to 50% of the tax adjustment.

What is the minimum tax liability?

Spain does not have a general minimum tax (like the US AMT). However, companies with turnover over €20 million are subject to a minimum tax liability equal to 15% of the tax base (with certain adjustments). Some autonomous communities have their own minimum tax provisions for certain activities.

Disclaimer

This guide provides general information about Spanish corporate tax for the 2026 tax year. Tax laws, rates, and regulations may change. The information does not constitute professional tax advice. All businesses should consult with a qualified Spanish tax advisor (asesor fiscal) for advice tailored to their specific circumstances.