Corporate Income Tax in Spain: Obligations and Payment Methods
Corporate Income Tax in Spain: Key Obligations and Payment Methods
Categories for Installment Payments
There are two categories for installment payments:
- Category A: Based on the amount paid the previous year.
This method generally applies to all entities that have not explicitly chosen the other modality. It consists of taking the tax paid in the latest period as a basis for payments to be made. An average of 18% is applied to the base thus obtained for each year, building on the State Budget Law. - Category B: Based on the profit of the current year.
To use this modality, it is necessary to specifically opt for it. This is done through the presentation of a census declaration during February, stating this option. This mode of payment by installment is mandatory for large companies that, based on their volume of transactions, are required to submit monthly VAT statements.
Calculation of Installment Payments
- The first payment, to be made in April, is calculated as follows: the base is the profit of the company for the first three months of the year. From this base, premiums, deductions, and income already accounted for are subtracted. A certain fraction of the appropriate tax rate for the company is applied to the base thus obtained. This fraction is set for each year in the General Budget Law of the State, as it can vary.
- The second installment, which takes place in October, is calculated the same way, but taking the profit of the first nine months and deducting the installment payment made in April from the amount to be entered.
- The third payment, made in December, is calculated using the same procedure, taking into account the results of the first eleven months.
Lower Tax Rates
- For the first EUR 120,202.41 of the tax base, 25% is applied.
- The remainder is subject to 30%.
Tax Period and Declaration
The norm in Spain is to match the fiscal year with the calendar year, i.e., the fiscal year usually ranges from January 1st to December 31st. Therefore, the tax period coincides with the calendar year, and the declaration must be submitted during the first 25 days of July.
The corporate income tax declaration, accompanied by the required documentation, must be filed at the office of the tax office, tax agency, or, where appropriate, the tax agency of the autonomous region, or any authorized associated organization.
Tax Declaration Forms
- Model 201 can be used by:
- Entities resident in Spain or non-residents operating in Spain through a permanent establishment.
- Entities that are not credit institutions.
- Entities that are not integrated into a corporate group.
- Entities that are not insurance companies and meet a number of requirements.
- Model 200 must be used by: Entities that do not meet the necessary conditions to use Model 201, and other entities that, although they may use Model 201, opt for this one.
- Model 220 must be used by: Corporate groups required to present consolidated financial statements.
- Model 225 must be used by: Property companies, which are those in which more than half of their assets consist of securities or are not affected by economic activities, and more than 50% of the capital belongs to 10 or fewer partners or a family group.
Accounting and Registration Obligations
Companies are required to comply with certain formalities, including keeping records. If an entity subject to this tax has assets registered in its name that are not recorded in the accounts, it will be presumed that they have been purchased with unreported income.
Installment Payments
Installments are payments that must be made on account of corporate income tax in the first 20 days of April, October, and December. The Model 202 form is used for installment payments.