Newly created companies may apply the 15% rate if they are not part of a group

Access to the reduced 15% tax rate for newly created entities is conditioned not only by their date of incorporation but also by their operational nature and control structure. The Dirección General de Tributos (DGT) has specified the limits these companies must meet to avoid the improper application of this tax benefit.

What the DGT has ruled

The inquiry analyzes whether a newly created entity can benefit from the reduced tax rate provided for in Article 29.1 of the Corporate Income Tax Law (LIS). The tax authority's criteria focus on three fundamental pillars:

• Development of economic activity: The entity must effectively carry out an economic activity to comply with regulatory requirements.
• Absence of a corporate group: It may not apply this rate if it is part of a group of companies, according to the definition in Article 42 of the Commercial Code. The administration determines the group status by analyzing the first tax period with a positive taxable base and the following period.
• Nature of the entity: The company must not be considered a patrimonial entity, in accordance with the provisions of Article 5.2 of the LIS.

What it means for you

If you are incorporating a new company, compliance with these requirements is decisive for your initial tax burden. It is not enough to be a newly created company; the ownership structure and actual activity are the factors that will validate the use of the 15% rate. If the entity is controlled by other companies that form a group, it will lose the right to this reduced rate, even if it is a newly created entity.

What should be done

It is necessary to verify the company's shareholding structure before its incorporation to ensure that it does not fall into the condition of a corporate group. Likewise, the economic activity carried out from the beginning must be documented to prove that the entity does not have a merely patrimonial character. Since the group classification is analyzed based on the results of the first financial years, the planning of the corporate structure must be carried out in advance.