The Ultimate Guide to Corporate Tax in Spain (2025 Edition)

Spain is one of Europe’s most vibrant economies, a major gateway between Europe and Latin America, and a preferred destination for international investors, startups, and multinational enterprises. Understanding how corporate tax works in Spain is critical if you’re looking to do business here—whether you’re launching a new venture, managing a subsidiary, or investing through a holding structure.

This comprehensive guide covers everything you need to know about Spain’s Corporate Income Tax (Impuesto sobre Sociedades) in 2025: tax rates, special regimes, deductions, international compliance, and more. Optimized for entrepreneurs, tax consultants, legal advisors, and financial decision-makers, this post aims to demystify the Spanish corporate tax system.

Overview: What Is Corporate Income Tax in Spain?

Corporate Income Tax (CIT) in Spain is a direct tax levied on the income of legal entities (companies and similar legal structures). It is regulated primarily by the Corporate Income Tax Law (Ley 27/2014) and administered by the Agencia Tributaria (Spanish Tax Agency).

• Resident companies pay CIT on their worldwide income.
• Non-resident companies are only taxed on income generated in Spain.

CIT is an annual tax, but businesses make quarterly advance payments based on previous year profits or current earnings.

Who Pays Corporate Tax in Spain?

Entities subject to corporate tax in Spain include:

• Spanish limited companies (S.L., S.A.)
• Branches or permanent establishments of foreign companies
• Associations, foundations, cooperatives
• Holding companies and asset management entities

Certain exempt organizations (e.g. charities) may be partially exempt but still required to file.

Standard Corporate Tax Rates (2025)

As of 2025, the general CIT rate is 25%.

However, there are reduced or increased rates based on company size, sector, and other eligibility criteria:

Key Concepts: Tax Base, Deductions, and Adjustments

Taxable Base (Base Imponible)

The taxable base is calculated as follows:

Revenue – Allowable Expenses ± Adjustments + Add-backs – Deductions = Tax Base

Common Deductible Expenses:

• Staff salaries, social security
• Rent, utilities, office expenses
• Professional services
• Travel and representation (limited)
• Depreciation and amortization

Non-Deductible Expenses:

• Corporate fines or penalties
• Certain donations
• Non-documented expenses

Spain follows accrual-based accounting, and tax adjustments must align with Spanish GAAP or IFRS, depending on entity type.

Corporate Tax Filing Obligations in Spain

Filing Schedule:

• Year-end: Normally 31 December
• Tax return (Modelo 200) due within 25 days after the sixth month of the year (i.e. by 25 July for calendar-year companies)
• Quarterly advance payments via Modelo 202 (April, October, December)

Required Forms:

• Modelo 200 – Annual CIT return
• Modelo 202 – Instalment payments
• Modelo 232 – Related-party transactions and tax haven reporting
• Modelo 220 – For tax groups (consolidated entities)

Special Corporate Tax Regimes in Spain

6. a) Newly Created Companies

• Eligible for a reduced 15% rate for the first two tax years with positive taxable income.
• Company must not be part of a group or derived from an existing entity.

1. b) SOCIMIs (Spanish REITs)

• Enjoy a 0% CIT if they distribute 100% of rental profits.
• Must be listed and meet asset and profit distribution criteria.
• A 15% tax applies if profits are retained.

1. c) ZEC Regime (Zona Especial Canaria)

• Available in the Canary Islands to stimulate investment.
• Tax rate of just 4% on qualifying activities.
• Requirements include job creation and minimum investment.

1. d) R&D Tax Credits

• Tax relief of up to 42% of eligible expenses.
• Credit can be monetized under certain limits.

Withholding Taxes and Double Taxation Relief

Spain applies withholding tax (WHT) on:

Reduced rates or exemptions apply under EU directives or double tax treaties (DTTs).

Double Taxation Treaties

Spain has 90+ DTTs in force, allowing residents to avoid double taxation via:

• Tax exemptions in Spain
• Foreign tax credits for tax paid abroad

Anti-Avoidance and Transfer Pricing

Transfer Pricing Rules

Spain follows OECD guidelines on transfer pricing. Requirements include:

• Local file and master file documentation
• Comparable transaction analysis

Controlled Foreign Company (CFC) Rules

CFC rules apply when a Spanish company owns a non-resident entity taxed at <75% of Spain’s rate.

GAAR and Specific Anti-Abuse Rules

• GAAR empowers tax authorities to reclassify artificial arrangements.
• Specific anti-abuse rules apply to mergers, dividends, hybrid instruments, etc.

Tax Groups and Consolidation

Groups of Spanish companies may opt for tax consolidation:

• Treated as one entity for CIT purposes
• Must own at least 75% of subsidiaries
• Requires Modelo 220 annually

Benefits:

• Offsetting losses and profits across group
• Simplified intra-group transactions

OECD Pillar Two and Global Minimum Tax

As of 2024, Spain has implemented the 15% global minimum tax under the OECD Pillar Two framework:

• Applies to MNEs with revenues > €750M
• Ensures that low-taxed income is subject to top-up tax in Spain
• Reporting obligations coordinated with the EU Directive 2022/2523

Recent Reforms and 2025 Developments

Spain continues to adapt its corporate tax code:

• Minimum effective tax for large corporations (2024 law)
• Digital services taxation applicable to large online platforms
• Enhanced green investment incentives for 2025 (energy-efficient asset deductions)
• Simplification of R&D monetization

Stay informed via BOE (Boletín Oficial del Estado) and AEAT announcements.

Tax Audits and Penalties

The AEAT is proactive in audits, especially in:

• Transfer pricing
• Cross-border arrangements
• Aggressive tax planning

Penalties:

• Late filing: 1% + interest per month
• Underreported income: Up to 50% fine
• Fraud or evasion: Up to 150% of the unpaid tax

Voluntary disclosures can reduce penalties significantly.

Corporate Tax Planning in Spain

Key strategies for optimizing tax position:

• Structuring through SOCIMIs or ZEC entities
• R&D and green investment deductions
• Proper use of loss carryforwards
• Withholding tax optimization using DTTs
• Documentation of intra-group pricing

Work with an advisor to assess:

• Eligibility for reduced rates
• International structuring options
• Tax residence risks

How Taxadora Helps

At Taxadora, we help private individuals with their Spanish tax obligations and can help corporate clients with their employees tax returns. We handle both Resident and Non-Resident taxation in Spain and can also assist clients with Beckham law tax returns. If your company has operations in Spain and your employees need help sorting out their personal income taxes we are happy to partner with you. 

If you are thinking of running a small business in Spain we can also advice you on the best way to set this up and can assist you with “autonomo” accounting and taxation. 

We can also check if it makes sense for you to register a corporate entity or register as autonomo. We can also advice a foreign entity who has employees in Spain on the obligations in Spain. If you are working remotely from Spain for a foreign employer we can let you know what you are obliged to do in Spain and what obligations your employer might have towards Spanish authorities.

Final Thoughts

Corporate tax in Spain in 2025 is more nuanced and strategic than ever. With competitive rates for small companies, global tax alignment through OECD reforms, and opportunities for innovation deductions and regional incentives, Spain remains attractive for business.

The key is to structure wisely, comply fully, and use available incentives.

Looking for help? Get in touch with Taxadora to simplify your tax obligations and focus on growing your business.