The Corporate Income Tax Law was established by Law 43/1995, which established certain parameters on which the structure of this tax is currently based; however, since its publication, it has undergone several modifications over the years.
The purpose of this article is to explain the main aspects of this Corporate Income Tax.
What is Corporate Income Tax?
It is the tax levied on the income obtained by a legal entity, or an entity without legal personality, such as investment funds, pension funds, among others. It is different from the tax on individuals, which is called Personal Income Tax.
What is the Corporate Income Tax levied?
As mentioned above, this tax is levied on the income of all companies and other legal entities that are resident in Spain. For this purpose, those that have been incorporated in Spain or those whose effective headquarters are in Spain will be considered as resident.
Which entities are subject to the tax?
Corporate income tax is payable by legal entities and other unincorporated entities. Commercial companies, civil companies, cooperatives, sole proprietorships, associations, foundations, among others, are also considered taxpayers.
In turn, civil companies without legal personality and those that do not have a commercial purpose are not taxpayers of this tax.
Taxable income for corporate income tax purposes
The taxable base of the tax period results from the subtraction of the income subject to the tax minus the costs and expenses accrued during the tax period. It should be noted that financial expenses for debts with related parties and whose purpose is to acquire shares of another company of the group, as well as expenses for labor termination that exceed a maximum amount, are not deductible.
Tax Rate and Quota
The tax rate corresponds to the tax rate, which will be multiplied by the taxable base indicated, the general tax rate is 25%.
Form and deadline for filing
The corporate income tax return must be filed within 25 calendar days following the 6 months after the end of the tax period, through “Sociedades Web”, which is the server of the Tax Agency, thus it will no longer be necessary to download any type of telematic program.