The final quarter of the year is when tax planning moves from theory to concrete action. With the 2024 fiscal year-end approaching, companies still have room to take measures that optimise their tax burden for the year. This guide reviews the main levers available, organised by tax area, so that finance and tax teams can prioritise their actions in the weeks that remain.
Corporate Tax: Measures Before 31 December
Capitalisation Reserve
The capitalisation reserve allows a reduction of the corporate tax base by 10% of the net increase in equity for the year — provided that increase remains in the company for five years without being distributed. To maximise its use in 2024, it is necessary to calculate the expected net equity increase at year-end and ensure the reserve is formally allocated before 31 December through a resolution of the general meeting or governing body.
Levelling Reserve for SMEs
Companies taxed under the small company regime (ERD, with turnover below €10 million) can allocate a levelling reserve, which reduces the taxable base by up to 10% — capped at €1 million — and defers that amount for five years. If the company generates tax losses within those five years, the reserve is automatically offset; otherwise it is taxed at the general rate in the fifth year. It is a highly efficient deferral tool for SMEs with stable profitability.
Accelerated Depreciation of New Assets
Investments in new assets made during 2024 — machinery, IT equipment, software — can be depreciated on an accelerated basis in years when the company is taxed under the ERD regime: up to double the maximum depreciation rate under the official tables. If the asset was acquired before 31 December but has not yet entered service, depreciation can only begin from the date it is brought into use.
Tax Loss Carryforward Offset
Reviewing accumulated tax losses (BINs) and the optimal offset strategy is one of the most valuable exercises in year-end tax planning. With the 70% cap on pre-offset taxable income for large groups and 100% for SMEs, and given that some BINs may become time-barred if their origin is not adequately documented, it is essential to verify that the BIN inventory is correctly documented and that the offset strategy is optimised for future years.
Tax Credits: Reviewing and Maximising Before Year-End
R&D&I Deduction
Companies carrying out research, development or technological innovation activities should review before year-end whether expenses incurred in 2024 meet the requirements for the deduction. The R&D deduction can reach 42% of qualifying expenditure when investment exceeds the two-year average; the technological innovation deduction is 12%. For activities qualified as R&D with a binding report from the Ministry of Science, the deduction applied is binding on the AEAT.
Permanent Employment Creation Deduction
The hiring of workers on permanent full-time contracts during 2024 can generate tax credits of €3,000 per worker (or 50% of the unemployment insurance contribution for the first employee). This deduction is compatible with Social Security contribution rebates for priority groups.
Charitable Donation Deduction
Donations made before 31 December to entities covered by Law 49/2002 (foundations, NGOs, political parties and associations declared to be of public utility) generate a corporate tax credit of 35% of the donated amount (40% from the third consecutive year of donation to the same entity). Companies with CSR budgets can plan donations to maximise the tax credit.
Personal Income Tax for Partners and Employees: Year-End Optimisation
For working partners and variable-pay employees, the final quarter offers IRPF planning opportunities:
- Company pension plan contributions: The deduction limit is €1,500 for personal contributions plus an additional €8,500 if the employer contributes. Employer contributions are deductible for corporate tax purposes and exempt from personal income tax for the employee up to that limit.
- Benefits in kind: Certain benefits in kind — such as private health insurance up to €500 per beneficiary, meal vouchers and collective transport — are exempt from IRPF within legal limits and deductible for corporate tax.
- Withholding rate adjustment: If a recipient’s remuneration in 2024 has changed significantly compared to 2023 (bonus, supplements, salary change), adjusting the withholding rate on the final payslips avoids a high supplementary settlement on the annual personal tax return.
Year-End Close: Essential Documentation
The tax close is not just a matter of numbers: the documentation that supports it is as important as the quantitative result. Companies must ensure the following is in order:
- Invoices and contracts supporting significant deductible expenses
- Technical documentation for R&D&I projects (reports, time records, external supplier invoices)
- Rental agreements, usage rights contracts or leases for assets included in depreciation
- Minutes of governing body meetings recording approval of capitalisation and levelling reserves
- Up-to-date transfer pricing documentation for related-party transactions
At BMC our specialist tax team is here to help. See our tax services.
