Spain: Tax measures introduced for 2023

The Spanish Government has approved several tax measures which have come into force in 2023. The main measures regarding corporate income tax are summarised below:

• A reduced rate of 23% (instead of the general rate of 25%) is applicable to companies with a group turnover of less than 1 million euros. The special rate is not applicable to asset-holding companies.
• Entities that are part of a tax group will only be entitled to offset 50% of the losses made in a financial year against profits made by the group entities during the same financial year. The remaining 50% shall be included in the tax base of the tax group in equal instalments in each of the first 10 following tax periods. This is a temporary measure applicable to financial year 2023.

This measure applies in addition to the already existing limitation to offset losses. In this regard, tax losses can be offset up to the higher amount between one million euros and a percentage of the taxable base which depends on the taxpayer’s turnover, i.e. turnover of less than 20 million euros: 70%, turnover between 20 million and 60 million euros: 50% and turnover of at least 60 million euros: 25%.

• Certain economic activities carried out in the Balearic Islands will benefit from some tax incentives during the financial years 2023 to 2028.
• Startups can benefit from several tax benefits; i.e. (i) reduced rate of 15% during the first four years where the company obtains a positive taxable base, (ii) no obligation to file instalment payments during the first two years after the company obtains profits and (iii) special rules regarding the deferment of tax debts can be applied.

It must be noted that this measure has been introduced by the law known as “Startups Law”, which introduces measures not only regarding corporate income tax, but also rules that benefit the startups’ investors and employees. In this connection, (i) the stock option benefits for employees are better than the general ones, (ii) investors can benefit from a tax credit and (iii) the law has added flexibility to the inpatriate regime for individuals – amongst others, it allows “digital nomads” to apply the regime.

Read the WTS Global International Corporate Tax Newsletter here.