The corporate tax (IS) is the levy on income earned by legal entities resident in Spain and by permanent establishments of non-resident entities. With more than 1.7 million annual returns, it is one of the pillars of the Spanish tax system and the primary tax obligation of any company. This guide explains clearly, updated to 2026, everything a Spanish company needs to know: who pays, how the taxable base is calculated, which rates apply, which deductions are current and what the unavoidable deadlines are.
Who is subject to Corporate Tax?
Under Article 7 of Law 27/2014 on Corporate Income Tax (LIS), all legal entities resident in Spanish territory are Corporate Tax taxpayers, regardless of their legal form: limited companies, public limited companies, worker-owned companies, cooperatives, associations, foundations and other legal persons. This includes:
Tax residency in Spain is attributed to entities that meet any of three criteria: incorporation under Spanish law, registered office in Spain, or effective management and control in Spanish territory (Art. 8 LIS).
Territorial scope. Corporate Tax covers the worldwide income of resident entities, regardless of where it arises. Income earned abroad is taxable in Spain, with the right to deduct foreign taxes paid (exemption or credit method, depending on the type of income). The foral territories of the Basque Country and Navarre have their own regimes (Economic Agreement and Economic Convention), though coordinated with national legislation.
Partially exempt entities. Certain entities — foundations, publicly recognised associations, political parties — are exempt only on income related to their social purpose; income from economic activities unrelated to that purpose is taxable.
Tax rates in 2026
The applicable rate depends on the nature and size of the entity:
| Type of entity | Rate |
|---|---|
| Standard regime | 25% |
| Newly incorporated companies (1st and 2nd period with positive base) | 15% |
| Entities with turnover < €1M | 23% |
| Fiscally protected cooperatives (cooperative results) | 20% |
| Credit institutions and hydrocarbon exploration companies | 30% |
| SOCIMIs (Spanish REITs) | 0% / 19% depending on dividend distribution |
| Pillar Two groups (revenues ≥ €750M) | Minimum effective rate of 15% |
The 23% rate for micro-SMEs (net turnover below €1 million, introduced by Law 31/2022) remains in place for 2026 without changes. The proposed reduction to 20% contemplated in earlier phases was not approved.
Pillar Two — the global minimum complementary tax — applies to groups with consolidated revenues of €750 million or more. Transposed by Law 7/2024, of 20 November, it is fully in force for periods beginning on or after 31 December 2023. If the group’s effective rate in Spain or in a foreign jurisdiction falls below 15%, the ultimate parent (or the designated subsidiary) pays a complementary tax (top-up tax) to reach that threshold.
Taxable base: from accounting profit to tax liability
The Corporate Tax base is not the accounting profit. Article 10 LIS establishes that it is calculated by adjusting the accounting result through the extra-accounting adjustments provided in the LIS itself.
Permanent and temporary adjustments
Adjustments may be:
- Permanent: differences that do not reverse in future years. Example: non-deductible expenses (fines, donations not covered by Law 49/2002, liberalities). They increase the base with no future counterpart.
- Temporary: differences that reverse. Example: accounting depreciation higher than the tax allowance (creates a positive temporary adjustment that reverses when the accounts depreciate less than the tax limit).
Non-deductible expenses (Art. 15 LIS)
Notable examples include:
- Remuneration of equity (dividends paid to shareholders).
- Fines, criminal or administrative penalties.
- Gambling losses.
- Liberalities and client or supplier entertainment exceeding 1% of turnover.
- Finance costs exceeding 30% of adjusted EBITDA (with a minimum of €1 million deductible).
Depreciation
The LIS permits several methods: straight-line per official tables, declining balance, sum of digits and AEAT-approved depreciation plans. Accelerated depreciation for new tangible and intangible fixed assets in SMEs (turnover < €10M) allows doubling the maximum table coefficient (Art. 103 LIS), generating a negative adjustment that defers tax.
Provisions
Provisions are deductible only in the cases expressly provided by the LIS (Art. 14). Risk and expense provisions are not generally deductible; however, impairment of trade receivables more than six months past due, or where the debtor is in insolvency proceedings, is deductible.
Tax loss carryforward (NOLs)
Article 26 LIS governs the offset of prior-year tax losses. Key aspects in 2026:
- No time limit: losses can be carried forward and offset in future years without any expiry date.
- Quantitative cap: when the pre-offset taxable base exceeds €1 million, the offsettable amount may not exceed 70% of that base. The remaining 30% is taxed that year and generates new unrelieved losses carried forward.
- Exception for newly incorporated entities: the 70% cap does not apply in the first three tax periods with a positive base.
- AEAT verification: the tax authority may examine the losses of a prescribed year for quantum and origin purposes, even if it cannot reopen that year’s assessment (Art. 26.5 LIS, current wording following Supreme Court rulings).
- Acquiring companies with losses: Art. 26.4 LIS limits the use of losses where a majority stake is acquired in an inactive or near-inactive entity specifically to exploit those losses.
Deductions in force in 2026
Deductions reduce the gross tax liability directly (not the taxable base). The main deductions in force in 2026:
Research, Development and Technological Innovation (R&D+i)
- R&D (Art. 35.1 LIS): deduction of 25% of R&D expenditure in the year, increased to 42% if expenditure exceeds the average of the two prior years.
- Technological innovation (Art. 35.2 LIS): deduction of 12% of expenditure on projects not classified as R&D but as innovation.
- Cap: the aggregate of incentive deductions may not exceed 25% of the gross tax liability net of double taxation deductions (or 50% if the R&D deduction exceeds 10% of the liability).
- Cash refund option: companies more than 2 years from the generation date may apply for a refund of the unused deduction due to insufficient tax liability, at a 20% discount (Art. 39.2 LIS).
Job creation
- For each employee with a disability: €9,000 to €12,000 deduction depending on disability grade (Art. 38 LIS).
- Workers on permanent support-for-entrepreneurs contracts — additional deduction linked to the first €1 million of taxable base (subject to applicable employment legislation).
Donations and cultural patronage (Law 49/2002)
Deduction of 40% of the deduction base (donations to non-profit entities covered by Law 49/2002), rising to 50% if the amount donated in 2026 equals or exceeds that of 2025 (loyalty bonus). Cap: 15% of taxable base.
Film and audiovisual productions
- 20% of production costs for producers (up to €3 million deduction).
- 30% for investors financing another producer’s work (co-financing).
- Special deduction of 30–45% for foreign productions shot in Spain with minimum spending of €1 million.
Capitalisation and equalisation reserves
- Capitalisation reserve (Art. 25 LIS): reduction of 10% of the net increase in equity, subject to maintaining an non-distributable reserve for five years. Available to all entities taxed at the standard or reduced rate.
- Equalisation reserve (Art. 105 LIS): exclusive to smaller entities (turnover < €10M). Allows reducing the taxable base by up to 10% (maximum €1 million) to fund a reserve that offsets future losses or is taxed five years later if no losses arise.
Instalment payments: Form 202
Corporate taxpayers must make three advance payments against the annual return, known as instalment payments, filed and paid via Form 202.
Calculation methods
There are two methods:
-
Standard method (Art. 40.2 LIS): 18% is applied to the gross tax liability from the most recent period whose filing deadline had passed on the 1st of the month when the payment falls due, reduced by deductions, tax credits and withholdings at source. This is the default method for entities with turnover < €6 million.
-
Current-period base method (Art. 40.3 LIS): mandatory for entities with prior-year turnover ≥ €6 million; optional for others via AEAT notification in February. A percentage is applied to the taxable base accumulated from the start of the period to the end of March, September and November. The percentage is 5/7 of the tax rate rounded down. For the standard rate (25%), this gives 17%.
Filing deadlines
| Period | Deadline |
|---|---|
| 1st instalment payment | 1–20 April |
| 2nd instalment payment | 1–20 October |
| 3rd instalment payment | 1–20 December |
Entities whose turnover does not exceed €6 million are not required to file Form 202 if the standard method produces a nil or negative result.
Annual return: Form 200
The Corporate Tax return is filed via Form 200, which must be accompanied by the annual financial statements deposited at the Companies Registry.
Deadline
Article 124 LIS sets the filing deadline at 25 calendar days following the six months after the end of the tax period. For periods coinciding with the calendar year (year-end on 31 December), the window runs from 1 to 25 July of the following year.
If the year-end differs (for example, 31 March), the deadline shifts proportionally.
Link to the annual accounts
Form 200 requires entering the accounting profit for the year as a starting point. The annual accounts must therefore be prepared and approved before filing, or at least prepared if the approval meeting is still pending. Electronic filing is mandatory for all entities.
Self-assessment
Corporate Tax is a self-assessed tax: the company calculates the liability, deducts instalment payments and withholdings suffered, and pays the balance (or claims a refund if the result is negative).
Key changes in 2026
Pillar Two: fully operational
Law 7/2024 transposes Directive (EU) 2022/2523 on the global minimum tax. Groups with consolidated revenues ≥ €750M in at least two of the four prior years must calculate the effective rate by jurisdiction (GloBE ETR). If it falls below 15%, a complementary tax is triggered. The first applicable year is one beginning on or after 31 December 2023, so the first complementary tax returns will be filed in 2025–2026.
Tax measures under RDL 7/2026
Royal Decree-Law 7/2026, approved in response to the Middle East crisis and the revision of the Medium-Term Fiscal Framework, temporarily amends certain depreciation coefficients applicable to specific energy assets and extends the deduction for investments in renewable energy facilities for industrial companies. Consult the current legislation or our detailed analysis of RDL 7/2026 for the specific sectoral effects.
Extension of the minimum rate for Spanish groups
The 15% minimum rate on the taxable base for tax groups with consolidated turnover ≥ €20 million (introduced by RDL 3/2021) is maintained in 2026. Attempts to repeal it as part of budget negotiations did not succeed.
R&D+i deductions update
The draft Startup Ecosystem Bill (in parliamentary proceedings) proposes raising the technological innovation deduction from 12% to 15% for ENISA-accredited innovative companies. As of the date of this guide, the bill has not been enacted; monitor the BOE for updates.
DAC8 and tax transparency
Although DAC8 primarily affects crypto assets, the broader automatic exchange of information between member states increases the risk of detection of improperly supported Corporate Tax structures. Companies with cross-border operations should review their transfer pricing documentation and the application of the Article 21 LIS exemption.
Common errors and consequences
The AEAT systematically detects the following irregularities in Corporate Tax:
- Personal expenses reported as business costs (vehicles, travel, home utility bills without documented connection): positive adjustment and, in many cases, a serious infringement for concealment.
- Amortisation of intangibles with no defined useful life at a rate higher than permitted without an approved plan.
- Directors’ remuneration not reflected in the articles of association or evidenced by a Board resolution: non-deductible as a liberality (consistent administrative and Supreme Court doctrine).
- Related-party transactions without transfer pricing documentation: specific penalty of 15% of the adjustment (Art. 18.13 LIS).
- Failure to file Form 202 when required: surcharge of 5% to 20% depending on the delay, plus tax and interest.
- Offsetting losses above the cap: provisional assessment with interest and potential penalties if the conduct is classified as negligent.
Tax infringements in Corporate Tax are graded as minor (50% penalty), serious (50–100%) and very serious (100–150%), with aggravating factors for concealment or use of fraudulent means (Art. 187 LGT).
How BMC can help you
Corporate Tax concentrates the majority of tax risks for any Spanish company. Correct year-end tax planning, systematic application of all available deductions, and rigorous compliance with Form 202 and Form 200 deadlines are the difference between paying the right amount and overpaying — or, at the other extreme, taking on unnecessary risks.
At BMC we support companies across all aspects of Corporate Tax: from reviewing the accounting-to-tax reconciliation before year-end to filing the return, defending against AEAT audits and analysing the impact of Pillar Two on multinational groups.
To explore ways to legally reduce your tax bill, read our article on reducing Corporate Tax legally. For details on the global minimum complementary tax, consult our Pillar Two service. And for the 2025 year-end close, see our guide on key year-end accounting and tax points for 2025.
Need to review your 2025 Corporate Tax return or plan your 2026 instalment payments? Consult our tax advisers — first consultation free of charge.
Regulatory references: Law 27/2014, of 27 November, on Corporate Income Tax (BOE); Law 7/2024, of 20 November, establishing a complementary tax to guarantee a global minimum level of taxation for multinational groups and large domestic groups; instructions for Form 200 and Form 202 (AEAT); Pillar Two — OECD.
