On 27 October 2026, the Spanish Government confirmed a reduction in Corporate Income Tax (Impuesto sobre Sociedades) rates for small and medium-sized enterprises effective 1 January 2027. Micro-enterprises (turnover under €1 million) will benefit from a 17% rate, while other SMEs (turnover under €10 million) will see a 20% rate, down from the general 25%. The measure aims to boost competitiveness and retention of earnings for smaller businesses.
Key Takeaways
- Tiered Rate Structure: The reform introduces two reduced brackets: 17% for micro-enterprises and 20% for other SMEs, replacing the previous 23% rate for SMEs on the first €300,000 of taxable base.
- Eligibility Criteria: Classification depends on annual turnover thresholds; companies must verify their status each year to apply the correct rate.
- Planning Implications: Businesses should reassess profit distribution, investment timing, and group structures to maximize the benefit of the lower rates starting in FY2027.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement