Corporate tax rates for small companies in Spain, 2025–2029: the sliding scale and the October payment on account

The books of a small company in Puerto del Rosario close September with good news that few owners have noticed: the corporate tax on this year's profit will be lower than on last year's, and next year's lower again. The reform passed at the end of 2024 cut the rate for small companies in steps that run until 2029, and 2026 is the second step. There is one date before any of that matters: the payment on account that every company with a tax bill makes between 1 and 20 October. This note sets out which rate applies to which company, the scale year by year, what the October payment is and how it is calculated, and the two reserves that still let a small company lower this year's bill before 31 December.

Three rates, and how to know yours

The Corporate Tax Act begins with one figure: El tipo general de gravamen para los contribuyentes de este Impuesto será el 25 por ciento, the general rate for taxpayers of this tax shall be 25 per cent (Ley 27/2014, article 29). Two groups of companies pay less.

The first is the smallest: companies cuyo importe neto de la cifra de negocios del período impositivo inmediato anterior sea inferior a 1 millón de euros, whose net turnover in the immediately preceding tax period was under one million euros. They pay by a scale of two steps, a lower rate on the first 50,000 euros of taxable profit and a higher one on the rest. The second group is what the Act calls reduced-size entities, those whose turnover in the preceding period was under ten million euros (article 101). They pay one flat rate.

Three details decide which group a company is in. The yardstick is turnover, not profit, and it is last year's turnover, so a company knows its rate on the first day of the year. A company that belongs to a group adds up the group: el importe neto de la cifra de negocios se referirá al conjunto de entidades pertenecientes a dicho grupo, net turnover refers to all the entities belonging to that group, and the same applies where one person, alone or with close relatives, controls several companies (article 101). And none of the reduced rates is for a company that merely holds assets: one in which more than half of the assets are securities, or are not used in an economic activity, pays the general 25 per cent (articles 5 and 29), and letting property counts as an economic activity only where the company employs at least one person full time to manage it.

The scale, year by year

The reform did not cut the rates at once. A transitional provision gives each year its own figures, by reference to the year in which the tax period starts (transitional provision 44, added by Ley 7/2024). For 2026 the text for the smallest companies reads Por la parte de base imponible comprendida entre 0 y 50.000 euros, al tipo del 19 por ciento, for the part of the taxable base between 0 and 50,000 euros, at the rate of 19 per cent, and for reduced-size entities, tributarán al 23 %, they shall be taxed at 23 per cent.

The general rate stays at 25 per cent throughout. For the smallest companies the scale reaches its final figures in 2027; for reduced-size entities the descent takes two years more.

What it means on 60,000 euros of profit

Take a company with turnover under one million euros and a taxable profit of 60,000 euros, and apply each year's scale. For 2025 the bill is 12,700 euros: 21 per cent of 50,000 and 22 per cent of 10,000. For 2026 it is 11,600 euros: 19 per cent of 50,000 and 21 per cent of 10,000. For 2027 it is 10,500 euros: 17 per cent of 50,000 and 20 per cent of 10,000. At the general rate it would be 15,000 euros. These figures are arithmetic on the Act's rates, before any deduction or reserve.

New companies and startups: 15 per cent

A newly created company that carries on an economic activity pays 15 per cent en el primer período impositivo en que la base imponible resulte positiva y en el siguiente, in the first tax period in which the taxable base is positive and in the following one (article 29). The Act closes two doors. The activity is not new if related persons or entities carried it on before and transferred it to the company, or if, during the year before the company was formed, it was carried on by an individual who holds more than half of the new company. And a company that belongs to a group is not newly created. For those still weighing whether to trade as a company at all, the comparison is in our note on autónomo or SL.

Companies with the legal status of startup keep the 15 per cent for longer: en el primer período impositivo en que, teniendo dicha condición, la base imponible resulte positiva y en los tres siguientes, in the first tax period in which, having that status, the taxable base is positive, and in the three following ones, as long as they keep the status (Ley 28/2022, article 7).

In the Canaries: ZEC and RIC

Two instruments of the Canary regime sit on top of these rates. A company registered in the Canary Islands Special Zone pays a special rate on the profit of its operations there: El tipo de gravamen especial aplicable será del 4%, the special rate applicable shall be 4 per cent (Ley 19/1994, article 43), under conditions and within a registration window that we follow in our note on the ZEC deadline. And a company can reduce its taxable base with the Reserve for Investments in the Canaries, explained in our note on the RIC.

The October payment on account

Corporate tax for a calendar year is filed the following July, but it is paid in advance three times: En los primeros 20 días naturales de los meses de abril, octubre y diciembre, in the first 20 calendar days of April, October and December (article 40). In 2026 the second payment falls due on Tuesday 20 October; a company that wanted the Tax Agency to charge it to its bank account had to file between the 1st and the 15th. The form is modelo 202, filed online, and the other autumn dates are in our tax calendar.

There are two ways of calculating it.

On last year's tax. The default method takes the tax due in the last return whose filing deadline had passed on 1 October, which for a calendar-year company is the 2025 return filed in July, subtracts deductions, allowances and withholdings, and applies el porcentaje del 18 por ciento, the percentage of 18 per cent. A company whose 2025 tax was 12,700 euros, with no withholdings, pays 2,286 euros in October and the same again in December. This method looks backwards: this year's lower rate does not show in it, and neither does a bad year.

On this year's profit. A company may instead pay on the taxable base of the first three, nine or eleven months of the year. The percentage is then el porcentaje que resulte de multiplicar por cinco séptimos el tipo de gravamen redondeado por defecto, the percentage that results from multiplying the tax rate by five sevenths, rounded down: 13 per cent where the rate is 19, 15 per cent where it is 21, and 16 per cent where it is 23. The choice is made in the census return in February and binds the company until it withdraws it; above six million euros of turnover this method is compulsory.

A company with nothing to pay files nothing. The Tax Agency's manual says it plainly: No existirá obligación de presentar el modelo 202 en las autoliquidaciones en las que no debe realizarse ingreso o con cuota cero, there is no obligation to file modelo 202 where no payment is due or the amount is zero, unless turnover exceeded six million euros. That covers the company whose last return showed no tax due and, under the default method, the company in its first year, which has no earlier return to start from.

Two reserves before 31 December

The capitalisation reserve. A company that keeps its profit instead of distributing it is entitled to una reducción en la base imponible del 20 por ciento del importe del incremento de sus fondos propios, a reduction in the taxable base of 20 per cent of the amount by which its equity has grown (article 25). The growth must be kept for three years, and a reserve of the same amount as the reduction must appear in the balance sheet and stay untouched for that time. The reduction cannot exceed 20 per cent of the year's positive taxable base, or 25 per cent for companies with turnover under one million euros, and the percentage rises, up to 30 per cent, where the average workforce grows.

The levelling reserve. Reduced-size entities have a second tool: they podrán minorar su base imponible positiva hasta el 10 por ciento de su importe, may reduce their positive taxable base by up to 10 per cent of its amount (article 105). It is a deferral, not a gift. The amount comes back into the base of the next five years as losses appear, and whatever is left is added at the end of the fifth; in the meantime a reserve of the same amount is locked in the balance sheet. The Act keeps it for entities that apply the rate of the first paragraph of article 29, so whether a given company qualifies is the first thing to check.

Both depend on the year-end figures and on a reserve that has to appear in the company's books, which is why they belong to the conversation of November and December and not to that of July. How the profit that stays in the company compares with a salary or a dividend is the subject of our note on paying yourself from your SL.

What our tax practice does

We plan a company's taxes before they fall due and file them on time under the Canary regime: income and corporate tax, the Canary incentives (ZEC, RIC and the deductions), a December look-ahead while moves still fit in the year, and representation before both tax agencies. The service is described on our tax advisory page, and you can book a consultation with last year's corporate tax return and this year's accounts to September.

Common questions

My SL will make about 40,000 euros of profit in 2026. What rate does it pay?

If its turnover in 2025 was under one million euros, 19 per cent: 7,600 euros. If it was between one and ten million, 23 per cent. Otherwise, 25 per cent.

We set the company up last year. Do we pay 15 per cent?

In the first tax period with a positive taxable base and in the next, provided the activity is really new: not one that related persons carried on before and passed to the company, and not one that the majority shareholder carried on personally during the year before it was formed.

Last year the company had no tax to pay. Do I file modelo 202 in October?

Not under the default method: with no tax due in last year's return there is nothing to pay, and the Tax Agency does not ask for the form where the amount is zero, unless turnover exceeded six million euros.

Our company only owns flats that it lets. Does it get the reduced rates?

Only if letting is an economic activity for tax purposes, which requires at least one employee working full time on it. A company with more than half of its assets outside any economic activity is an asset-holding entity and pays 25 per cent.

Are the 17 and 20 per cent of 2027 certain?

They are what the Act says today, and they need no further approval to apply. A later Act could change them, so plan with these figures and look again in December.

Facts verified in October 2026 (Ley 27/2014, articles 5, 25, 29, 40, 101 and 105 and transitional provision 44, in the wording of Ley 7/2024; Ley 28/2022, article 7; Ley 19/1994, article 43; the Tax Agency's practical manual for corporate tax 2025, chapter on the 2026 payments on account, and its page on tax rates, as they read on 6 October 2026). The figures in the examples are arithmetic on the Act's rates; this note is general information, not advice on a particular company.