Corporate income tax (Impuesto sobre Sociedades) in Spain is one of the key taxes that all legal entities carrying out economic activities in the country are required to pay. In 2025, this tax continues to play an important role in the Spanish tax system, representing a significant source of replenishment of the state treasury.

In this article we will look at the main aspects of corporate income tax in Spain, including tax rates, incentives, changes in legislation and payment procedures. 

Key aspects of corporate income tax in Spain

Corporate income tax rates 

In 2025, the following main corporate tax rates apply in Spain:

• Basic rate: 25%. This rate applies to most companies.
• Rate for new companies: 15% for the first two years, provided that the company first began to conduct economic activity.
• Reduced rates: may apply to certain types of organizations, such as non-profit organizations or companies engaged in research and development activities.

Tax base

The tax base is defined as the difference between a company’s income and expenses, adjusted for certain tax deductions and exceptions. It is important to consider that expenses must be documented and economically justified.

Example: Company with a turnover of 24,000 euros per year

Initial data:

• Turnover: 24,000 euros
• Tax base: 24,000 euros (without tax deductions and benefits)
• Tax rate: 25% (basic rate)

Tax calculation:

1. Let’s determine the tax base: 24,000 euros.
2. Let’s apply the tax rate: 24,000 * 0.25 = 6,000 euros.

Thus, the income tax of a company with a turnover of 24,000 euros per year will be 6,000 euros. 

Tax deductions and benefits

Spanish law provides for a number of deductions and benefits for companies, including:

• Investment incentives: Companies may qualify for tax incentives for investing in certain types of assets, such as equipment and real estate.
• Benefits for innovative companies: tax credits for R&D expenses (research and development work).
• Benefits for small and medium-sized enterprises (SMEs): simplified regimes and additional deductions. 

Procedures for paying corporate income tax in Spain

• Quarterly Advance Payments: Companies are required to make advance payments of income taxes on a quarterly basis. These payments are calculated based on the estimated tax base or the previous year’s results.
• Annual return: After the end of the financial year, companies are required to file an annual tax return (modelo 200), which reflects the final results of operations and calculates the final tax amount.
• Payment deadlines: the deadline for filing the annual return and paying the tax is 25 days after the end of six months from the end of the tax year. For most companies whose fiscal year coincides with the calendar year, this is July 25th. 

Changes in legislation in 2024

In 2024, Spanish tax legislation introduced several changes aimed at improving the tax system and stimulating economic activity:

• Increasing tax incentives for green investments: Companies investing in green technologies and projects can count on additional tax incentives.
• Simplification of tax procedures for SMEs: new mechanisms have been introduced to facilitate tax reporting and reduce the administrative burden for small and medium-sized enterprises.
• Combating tax evasion: strengthening controls over multinational companies and introducing additional transfer pricing reporting requirements. 

International aspects

Spain actively cooperates with other countries within the framework of international agreements to prevent double taxation. This allows companies to avoid double taxation on profits earned abroad and helps them conduct international business more efficiently.

Tax treaties

Spain has signed agreements to avoid double taxation with more than 90 countries, Russia among them. These agreements regulate the distribution of tax rights between states and prevent cases of double taxation.

Transfer pricing

Transfer pricing is the transfer of part of the profit in favor of those parties to the transaction who are based in countries with low taxes. To implement transfer pricing, the parties to the transaction must be interdependent. This is a fairly simple and most common scheme used to minimize taxes paid.

Companies conducting transactions with related parties are required to comply with transfer pricing rules to ensure that such transactions are conducted on arm’s length terms. In 2025, Spain continues to require documentation and reporting of such transactions. 

Result:

The corporate income tax in Spain in 2025 is an important element of the country’s tax system, providing a significant part of budget revenues.

Spanish tax legislation provides a company with a number of opportunities to optimize its tax burden through various deductions and benefits. Proper compliance with tax requirements and deadlines is critical to avoid penalties and other negative consequences.

The introduction of changes to tax legislation in 2024 was aimed at stimulating economic activity and simplifying tax procedures, thereby improving the investment climate in Spain.

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