Spain Corporate Tax - Guide for International Expansion

Are you considering expanding your business to Spain? Understanding the Spanish corporate tax system is crucial for making informed decisions about your international operations.

Spain offers a competitive business environment within the European Union, with established tax frameworks and various incentives for businesses. Whether you're planning to set up a subsidiary or expand your existing operations, knowing your tax obligations will help you navigate the Spanish market successfully. Wise Business can help streamline your international payments and manage your finances across borders, making your Spanish business operations more efficient.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Spain Corporate tax rate in 2025

The standard corporate income tax rate in Spain is 25% for most companies. This rate applies to resident companies on their worldwide income and to non-resident companies on their Spanish-source income.¹ Spain's corporate tax rate is competitive within the European Union, sitting just above the EU average of 21.27%.²

However, Spain offers reduced rates for certain types of companies. For tax periods beginning in 2025, micro-enterprises with a net turnover of less than €1 million benefit from a reduced rate of 21% on the first €50,000 of taxable income, with a 22% rate on the remaining income. Small entities, or SMEs with a turnover of less than €10 million, have a transitional tax rate of 24% for tax periods beginning in 2025, with this rate progressively reducing to 20% by 2028. Newly incorporated companies also enjoy a 15% rate on their profits during their first two tax periods in which they have a positive taxable amount.³

Additionally, Spain has implemented special tax regimes for certain activities. The Patent Box regime allows qualifying companies to apply a reduced effective tax rate of 10% on income derived from certain intellectual property rights. Companies engaged in research and development activities can also benefit from various tax credits and deductions.⁴

Read more about the corporate tax in United States

How to pay corporate tax in Spain

Corporate tax payments in Spain are managed through the Spanish Tax Agency (Agencia Estatal de Administración Tributaria - AEAT). Companies must file their annual corporate tax return (Form 200) and make payments electronically through the AEAT's online platform.⁵

Corporate taxes in Spain are paid in euros (EUR). Companies operating with functional currencies other than the euro must convert their financial statements to euros for tax purposes using the average exchange rate for the tax period.

The tax year in Spain typically runs from 1 January to 31 December, though companies can opt for a different accounting period. Annual corporate tax returns must be filed within 25 calendar days following the six months after the end of the tax period. For companies with a calendar year accounting period, this means the deadline is typically 25 July.⁶

Spain operates a system of advance payments (pagos fraccionados) throughout the tax year. Companies must make three advance payments by the 20th day of April, October, and December. These payments are calculated as 18% of the previous year's tax liability, with a minimum payment requirement for larger companies.⁶

Let's consider a practical example: if your company has a turnover of €1.5 million and operates with a profit margin of 10%, giving it a taxable profit of €150,000, the tax calculation would be as follows:

For a small entity with turnover between €1 million and €10 million (for tax periods starting in 2025), the entire taxable profit is taxed at a transitional rate of 24%:

• €150,000 × 24% = €36,000

For a company that does not fall under the reduced rates (e.g., a large company), the entire taxable profit is taxed at the standard rate of 25%:

• €150,000 × 25% = €37,500

Late payment penalties in Spain can be significant. If you miss the filing deadline, the penalty is a surcharge based on the delay, starting at 1% for each month of delay and capped at 15% for delays over 12 months. Additionally, late payment interest is charged at a rate that is currently 4.0625% annually.^{7 8}

Companies that fail to make the required advance payments face surcharges of 5%, 10%, 15%, or 20% depending on how late the payment is made. The surcharge increases the longer the delay, making timely compliance essential.⁹

When expanding your business to Spain, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to expand internationally with local EUR account details. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Spain

Companies in Spain must comply with the Spanish Tax Agency (AEAT) requirements. Staying on top of registrations, deadlines, and reporting is essential to avoid penalties.

Tax Registration

• Register early with the tax authorities to ensure compliance.
• Core taxes include Spain's corporate tax (Corporate Income Tax—CIT), Value Added Tax (IVA), Withholding Tax, and sector-specific levies such as alcohol or tobacco duties.

Annual Corporate Filing

• Corporate income tax returns must be filed within 25 calendar days following the six months after the end of the accounting year (e.g., 1–25 July if the fiscal year matches the calendar year).
• The fiscal year cannot exceed 12 months. Incorporation, dissolution, or accounting changes may result in shorter tax periods.
• Companies must also make advance corporate tax installments based on estimated profits.

Record Keeping

• Businesses must maintain accurate records for audits and inspections.
• The tax inspection department verifies returns and may adjust assessments if irregularities are found.
• Reliable corporate income tax software can simplify reporting and record management.

Overseas Asset Disclosure

• Foreign assets such as property, securities, or accounts must be declared to avoid penalties.⁶

Fiscal Representative

• Non-EU/EEA residents must appoint a fiscal representative, who acts as the official contact with AEAT.¹⁰

Efficient record management, timely corporate income tax filings, and proactive planning help businesses meet corporate tax deadlines and operate securely in Spain.

International expansion to Spain

Spain’s corporate tax system shapes how businesses plan their operations and manage profitability. It presents a unique blend of economic strength, strategic location, and strong infrastructure, all of which are strong draws for companies planning overseas expansion.

According to the National Statistics Institute, in 2023, the Spanish economy grew by 2.5%, five times higher than the European average. Spain is the fourth-largest economy in the EU and the 14th worldwide. It boasts a GDP of $1.4 trillion and ranks 13th globally in foreign investment inflows. Over 18,000 foreign companies already operate in Spain, including 70 of the top 100 firms in Forbes Global 2000.¹¹

Apart from this, businesses can also benefit from a large domestic market of 48 million people and an additional 85 million annual visitors. Unrestricted access to the EU’s 500 million consumers is just what a business needs to make its mark. This region also serves as a gateway to Latin America, the Middle East, and North Africa, reaching over 1.1 billion potential customers. The country is the 11th largest exporter of commercial services, valued at $115 billion, and its regulatory framework is among the least restrictive for international investments, as recognised by the OECD.¹¹

Its infrastructure is another factor that enhances its corporate appeal. The country has 50 airports, 46 ports, and the EU’s largest highway network, ensuring efficient connectivity for trade and logistics. It also operates the world’s third-largest high-speed rail system and Europe’s largest logistics platform, making distribution seamless across continents.¹²

Talent availability is another advantage. Spain ranks third in the EU for the number of scientists and engineers, while its business schools consistently feature in Europe’s top rankings.¹³ This pool of skilled professionals supports innovation and growth, helping foreign investors navigate corporate tax in Spain regulations, tax and corporate law requirements, and effectively evolving corporate tax reforms.

The roadmap to setting up a business in Spain goes as follows:

1. Choose a suitable business structure.
2. Register the company name with the Corporate Registry.
3. Obtain a tax identification number (NIE).
4. Open a company bank account.
5. Register the business with the Spanish Tax Agency.
6. Set up proper record-keeping systems to ensure compliance.

The steps for starting a business in Spain are similar to other European countries. If you learn to mold your business plan according to Spanish laws, it gets easier to settle in other European countries, too.

Read more about the corporate tax in Nevada

Incorporation of Business in Spain

Foreign investors must follow a structured legal process set out by the Spanish Companies Act to incorporate a business in Spain. The main steps include:¹⁴

• Obtain a Tax Identification Number (NIF): Non-residents must secure a NIF before starting the incorporation process. This number is required for tax and corporate law compliance.

• Register the company name: Apply for a clearance certificate with the Central Companies Registry to confirm that the chosen name is unique.

• Apply for a Provisional NIF: This temporary tax number is needed to continue the incorporation steps.

• Open a company bank account: The account must be with a legally recognized bank in Spain and will be used to deposit the share capital.

• Deposit the initial share capital: A minimum capital requirement applies depending on the chosen business entity.

• File the Deed of Incorporation: Drafted and signed before a notary, this document sets out key details such as:

• Directors and shareholders

• Business objectives

• Ownership structure and share capital

• Rules governing the entity

• Any additional agreements between partners

• Convert the Provisional NIF into a Final NIF: Once the Deed and registration documents are filed, the company can obtain its permanent NIF.

• Register with the Spanish Commercial Registry: This completes the formal incorporation of the business.

• Declare foreign investment (Form D-1A): Required for companies with international participation, submitted to the Foreign Investment Registry (RIE).

Business Entities in Spain

According to the Spanish Companies Act,¹⁵ businesses can be established under several legal structures:

• Limited Liability Company (Sociedad Limitada – SL): The most common entity type, especially for small and medium-sized enterprises. It requires a minimum share capital of €3,000, which must be fully paid at incorporation. An SL can be set up with one or more shareholders, and liability is limited to their contributions.
• Stock Corporation (Sociedad Anónima – SA): Best suited for large companies or those intending to go public. It requires a minimum share capital of €60,000, with at least 25% paid upfront. Liability is limited to the shareholders’ investment, and the structure allows capital to be raised through share issuance.
• Partnership (Sociedad Civil): A simpler structure formed by two or more partners. No minimum capital requirement exists, but partners are personally liable for business debts and obligations.

When setting up in Spain, companies must also consider corporate tax planning early. The corporate tax rate in Spain currently applies uniformly to most entities, and understanding the distinction between income tax and corporate tax helps business owners manage liabilities effectively.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires a strategic approach to ensure compliance while optimising your tax position.

Stay compliant with local and international tax laws by completing all required registrations in every country where your business operates. File tax returns on time to avoid penalties and stay updated with changing tax regulations. Spain, as an EU member state, follows international standards including OECD guidelines on Base Erosion and Profit Shifting (BEPS) and has implemented the EU's Anti-Tax Avoidance Directive.

Leverage double taxation treaties effectively. Spain has an extensive network of double taxation agreements with over 100 countries, which can help prevent the same income from being taxed twice. These treaties often provide reduced withholding tax rates on dividends, interest, and royalties, making cross-border transactions more tax-efficient.

Maintain comprehensive and transparent financial records. Spanish tax authorities require detailed documentation for transfer pricing, and companies with related-party transactions exceeding certain thresholds must prepare transfer pricing documentation. Good record-keeping also facilitates compliance with Spain's digital tax reporting requirements and helps during tax audits.

Consider the impact of EU directives on your tax planning. Spain implements various EU directives that affect corporate taxation, including the Interest and Royalties Directive and the Merger Directive, which can provide tax advantages for qualifying transactions within the EU.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Spain efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Spain

Who is liable for corporate tax in Spain?

Spanish resident companies are liable for corporate tax on their worldwide income. A company is considered tax resident in Spain if it's incorporated under Spanish law or if its place of effective management is in Spain. Non-resident companies are only taxed on their Spanish-source income, typically through permanent establishments or specific types of Spanish income subject to withholding tax.

Are there any tax incentives for businesses in Spain?

Yes, Spain offers several tax incentives. The most notable include the Patent Box regime with a 10% effective rate on qualifying IP income, R&D tax credits of up to 42% for research activities, and various regional incentives offered by autonomous communities. The Canary Islands Special Zone (ZEC) offers a reduced 4% corporate tax rate for qualifying companies. Additionally, holding companies may benefit from the participation exemption regime for dividends and capital gains from qualifying shareholdings.

What is the tax treatment of dividends in Spain?

Dividends received by Spanish companies from other Spanish companies are generally exempt from corporate tax under the participation exemption regime, provided certain conditions are met (typically a minimum 5% shareholding held for at least one year). Dividends from EU companies and companies in treaty countries may also qualify for exemption. Dividends paid by Spanish companies to non-residents are subject to withholding tax at rates ranging from 19% to 0%, depending on the recipient's tax residence and applicable treaties.

What is the process for registering for corporate tax in Spain?

Companies must register with the Spanish Tax Agency (AEAT) within one month of incorporation or commencement of activities. This involves obtaining a Tax Identification Number (NIF) and registering for the relevant tax obligations, including corporate tax, VAT (if applicable), and social security. The registration can be completed online through the AEAT website or at local tax offices. Foreign companies establishing a permanent establishment must also complete specific registration procedures.

What are the common pitfalls to avoid regarding corporate tax in Spain?

Common pitfalls include failing to make quarterly advance payments, which results in surcharges; inadequate transfer pricing documentation for related-party transactions; missing the strict filing deadlines, which trigger automatic penalties; incorrectly applying tax incentives without meeting all qualifying conditions; and failing to properly document business expenses, as Spanish tax authorities require detailed supporting documentation. Additionally, companies should be aware of the thin capitalisation rules and ensure proper substance for tax planning structures to avoid anti-avoidance provisions.

Sources used in this article:

1. Spanish Tax Agency: Corporate Tax Rate
2. Tax Foundation: Corporate Tax Rates by Country 2024
3. Administration.gob.es: General Information on Corporate Tax
4. PwC Tax Summaries: Spain Tax Credits and Incentives
5. Spanish Tax Agency: Corporate Tax Return Models
6. PwC Tax Summaries: Spain Tax Administration
7. Bank of Spain: Default Interest Rates Table
8. Spanish Tax Agency: Surcharges on Tax Returns
9. Spanish Tax Agency: Types of Surcharges
10. Lextax: Tax Compliance for Foreigners
11. Invest in Spain: Economy
12. Invest in Spain: Infrastructure
13. Invest in Spain: Talent Pool
14. Invest in Spain: Company Set-up Guide (PDF)
15. Lawants: Spain Companies Act

Sources last checked 10/09/2025