A reduced Corporations Tax rate in Spain for 2023 has been implemented. This reduced tax rate of 23 % is applicable to micro and small companies and is subject to certain conditions which are explained below.

For FY23 companies with a turnover below 1 Million € during the previous fiscal year (thus, FY22) can apply a 23 % tax rate, as opposed to the 25 % standard rate.

Read the official info about the Corporations Tax Rate in Spain for 2023 at the Tax Office website

However, it is important to note that for companies belonging to a group, the turnover is ascertained at the group level (basically, consolidated accounts). 

The definition of group for this purpose is very broad and includes the so-called vertical groups (i.e. the parent company and its subsidiaries) and horizontal groups (i.e sister companies). Thus companies owned by the same person or family would qualify as a group. For instance, if a family holds a majority of voting rights in two entities, these two companies would be deemed to be a group.

Sure enough, when there is a group, intercompany sales must be disregarded, even if the group does not file consolidated accounts. The fact that the companies form a tax group or not, is irrelevant here. 

The 23 % tax rate is not applicable to companies not engaged in an active business activity, for instance, most holding companies.

Finally, the 15 % special tax rate for start-ups overrides this reduced tax rate. Thus, for newly formed companies the tax rate for the first two profitable years would be 15 %, and then on 23 % (if they qualify for it)

Should you have doubts if the threshold to apply the reduced 23 % tax rate would be applicable in your case feel free to contact us