Good news: Spain introduces a reduced corporate tax rate of 15% - 20% for newly established companies as of January 2013
Spain has introduced a reduced corporate tax rate for companies established on or after January 1, 2013. (Real Decreto Ley 4/2013, 22 February 2013). The reduced rate will be applicable for the first two years that the company is generating profit:
• 15% on taxable income up to 300.000 Euros, and
• 20% on taxable income exceeding 300.000 Euros.
However, the reduced corporate tax rate is not applicable in the following circumstances:
A) The economical activity in Spain has been previously carried out by arm-length individuals and/or companies who have transmitted the activity to the new company.
B) The economical activity in Spain has been carried out 1 year previously to the constitution of the new company, by an individual or company who is or who will be, more than 50% share holder (directly or indirectly), of the new Spanish company.
3. The new Spanish company is part of a group.
The new reduced corporate tax rate means a significant reduction of the existing corporate tax rates in Spain:
• Large companies with an annual turn-over of more than 10 million Euros are taxed at the general tax rate of 30%.
• Medium sized and small companies with an annual turn-over of less than 10 million Euros, are taxed at a rate of:
o 25% on taxable income up to 300.000 Euros, and
o 30% on taxable income exceeding 300.000 Euros.
• Micro-enterprises with an annual turn-over of less than 5 million Euros and fewer than 25 employees, that maintain or increase the number of employees, are taxed at a reduced rate of:
o 20% on taxable income up to 300.000 Euros, and
o 25% on taxable income exceeding 300.000 Euros.
For questions or more information, do not hesitate to contact us.
