Carmen Vizireanu, autor en Asesoría Fenix

Family holding company: how to organize your assets and pay less taxes

Sin categoría / December 15, 2025 March 11, 2026

Imagine having your wealth divided on several fronts: a running business on one side, rental properties on the other, and some stock market investments scattered in different accounts. Each asset has its own tax regime and, at the end of the year, you end up paying taxes as if you had several tax universes, with no connection between them. Sound familiar? This is a common scenario for many people with diversified wealth.

Now, imagine if you could bring all those assets together under a structure that not only organizes them, but also optimizes your tax burden. Such a structure exists and it’s called a family holding company. Throughout this article, we will explore what a family holding company is, how it works, when to create one, and what pitfalls to avoid so that it does not become a costly castle that is difficult to maintain.

Family Holding: What is it and how does it work?

A family holding company is a legal structure that centralizes and organizes the assets of a family or group of people, allowing them to jointly manage companies, real estate, financial investments and other assets. In simple terms, we could compare it to a financial family tree: the trunk is the holding company, the branches are the companies or assets it owns, and the leaves represent the profits generated through those investments.

The main purpose of a family holding company is the organization, protection and tax optimization of assets. By setting up a holding company, you not only centralize control over different assets, but you can also take advantage of several tax benefits.

Key aspects of family holding companies:

It is not an operating company: The holding company does not engage in direct commercial activities, but is responsible for managing and administering participations in other companies or assets.
Management and administration functions: In order for a family holding company to obtain tax advantages, it must demonstrate that it effectively participates in the management and administration of its subsidiaries or assets. This is crucial so that it is not considered a simple “holding company”, which could lose the tax advantages.

When is it convenient to create a Family Holding Company?

A family holding company is not a universal solution for everyone, but it is a strategic tool when certain conditions are met. When does it make sense to create a holding company?

When you have diversified assets: If you have a family business, several rental properties, investments in stocks or funds, and you are looking for a way to organize them fiscally, a holding company may be the perfect solution.
To plan the succession of your wealth: A holding company facilitates the transmission of wealth to future generations, as it allows you to apply significant reductions in the Inheritance and Gift Tax.
When you are looking for tax optimization: If your assets generate various types of income (salaries, rents, dividends, capital gains), a holding company can allow you to centralize all these benefits and optimize tax payments, taking advantage of tax exemptions and deferrals.

What tax advantages does a family holding company offer?

Dividend exemption: Dividends received by the holding company from its subsidiaries can benefit from a 95% corporate income tax exemption, which means that only a small portion of the profits (5%) is taxed.
Tax deferral on capital gains: When the holding company sells shares of a subsidiary, it only pays taxes on 5% of the gain obtained, which can significantly reduce the tax burden.
Offsetting of tax losses: If some of the holding company’s subsidiaries have losses, these can be offset against the profits of other subsidiaries, which reduces the total tax payable.

Practical Example: Tax Savings with a Family Holding Company
Imagine the following scenario:

An SL with profits of €100,000 per year.
Two rental apartments generating a net income of €24,000 per year.
A mutual fund portfolio that produces dividends of €10,000.

If you manage everything independently, the tax calculation would be as follows:

The SL pays 25% corporate income tax, i.e. €25,000.
Rents are taxed in the IRPF, let’s say at a rate of 40%, which is equivalent to €9,600.
Dividends are added to your personal income tax, which means paying another €4,000.

Total taxes: 38,600 €.

Now, suppose you decide to integrate all these activities into a family holding company:

The dividends that the holding company receives from the SL are 95% exempt, so they are only taxed at €1,250.
The profits generated can be reinvested within the holding company without being subject to personal income tax.

Total taxes: Tax savings can be around €10,000 to €15,000 per year, depending on the specific situation.

Question for you: What would you do with an extra €15,000 a year? Reinvest it, save it for your children’s education, or simply sleep more peacefully knowing that you are not giving money to the Treasury.

Advantages and Risks of Family Holdings

Family holding companies offer significant advantages, but certain risks and limitations must also be taken into account.

Advantages:

Tax optimization: As we have already mentioned, holding companies can take advantage of tax exemptions on dividends and capital gains, which can greatly reduce the tax burden.
Reinvestment without going through the IRPF: Profits generated within the holding company can be reinvested without having to go through the IRPF, allowing for faster and more efficient growth of the assets.
Ease of succession: The transfer of shares in a holding company can benefit from tax reductions in the Inheritance and Gift Tax, which facilitates estate planning and ensures the continuity of the family legacy.

Risks:

Incorporation and maintenance costs: The creation and maintenance of a holding company involves administrative and tax costs, such as notary, registration, auditing and consulting.
Management complexity: A holding company requires rigorous management and accurate accounting to take full advantage of tax benefits. This involves time and resources.
Compliance with requirements: In order for the holding company to benefit from the tax advantages, it must meet certain requirements, such as demonstrating that it is not a “holding company” that only manages passive assets.

Conclusion

The family holding company is a powerful tool for those seeking to organize their wealth efficiently, optimize their taxation and plan for succession. Although it is not suitable for everyone, especially those with small estates, it offers enormous tax benefits for those with diversified assets, such as businesses, real estate or investments.

If you are considering creating a family holding company, it is important that you get proper advice from a specialized professional to avoid costly mistakes and ensure that you comply with all legal and tax requirements.

At the end of the day, family holding is not just a strategy to pay less taxes, but a way to build a solid and orderly wealth legacy for you and future generations.

Frequently Asked Questions about Family Holding

What is a family holding company?

A family holding company is a company that centralizes a family’s wealth, managing businesses, real estate, investments and other assets under an organized and tax-efficient structure.

What are the tax advantages of a family holding company?

Among the main advantages are the exemption of dividends, the deferral of taxes on capital gains and the possibility of offsetting tax losses between the different subsidiaries of the group.

Is it expensive to maintain a family holding company?

Yes, the creation and maintenance of a family holding company involves additional costs, such as notary, registration, audit and advisory services, which can be high, especially for smaller estates.

How much tax savings can I obtain with a family holding company?

Tax savings vary depending on the size and structure of the estate, but it is estimated that optimizing dividends and capital gains can generate significant tax savings, between €10,000 and €15,000 per year in many cases.

When should a family holding company be created?

A family holding company is suitable when you already have diversified assets (companies, real estate, investments) and you are looking to optimize taxation, or when you want to plan the succession of your assets to your heirs in an efficient way.

Can I use a family holding company to plan my succession?

Yes, family holdings allow for tax reductions in the Inheritance and Gift Tax, which facilitates the transmission of wealth to the following generations with considerable tax savings.

Beckham Law: am I really interested if I have investments or a company in Spain?

Sin categoría / December 9, 2025 March 11, 2026

Imagine you decide to move to Spain for work and you find yourself with an attractive tax offer: to be taxed at only 24% on your salary, a relief compared to the high personal income tax rates in other countries! This benefit is possible thanks to the well-known Beckham Law in Spain. However, like everything that glitters, it has its less shiny side, especially if you own investments or a company in Spain.

In this article, we will delve into what the Beckham Law really means in Spain, how it can benefit you if you are a posted worker or a manager, and how this regime fits in if you have investments or a company in Spanish territory. You will see that, although the law offers attractive tax savings, there are also certain limitations that you should be aware of if you want to optimize your tax situation in a comprehensive way.

Beckham Law: What exactly is it?

The Beckham Law is a special tax regime that was introduced in Spain in 2005 with the aim of attracting international talent, especially in sectors such as technology, research and business. This law allows foreign workers to be taxed only on income generated within Spain, without having to pay tax on their global income. In addition, it establishes a flat tax rate of 24% on the first €600,000 of salary, a considerable attraction for many professionals.

Eligibility for the Beckham Law

In order to be eligible for this regime, you must meet a series of requirements:

Tax residency: Not having been a tax resident in Spain in the last 5 years.
Employment reason: Having arrived in Spain to work under an employment contract with a Spanish company or having been transferred within a multinational company.
Exclusion of non-labor income: The regime only applies to labor income, i.e., salaries received as a worker or manager.
Duration: This benefit applies for six years (the year of arrival and the following five years). In the case of some professions, such as researchers and entrepreneurs, it can be extended up to 10 years, but additional requirements must be met.

Beckham Law in Spain: Benefits and Pitfalls

Now that we know what the Beckham Law is and the requirements to access it, let’s explore the benefits and pitfalls to be aware of, especially if you own investments or a company in Spain.

Benefits of the Beckham regimen

Immediate tax savings: The main attraction of the Beckham Law is the tax savings, especially for those with high salaries. If you are a qualified professional or manager earning more than €200,000, this regime can save you thousands of euros each year by paying only 24% instead of the progressive IRPF brackets that can reach up to 47% for higher salaries.
Exclusion of foreign income: One of the most outstanding advantages is that, by being taxed as a non-resident, you are not required to pay taxes on your income generated outside Spain. This is especially attractive for those who have investments or properties outside the country, as they will not have to pay tax on such income in Spain.
Simplicity in tax planning: The fixed rate of 24% makes tax planning much simpler, eliminating the uncertainty caused by the progressive personal income tax system.

Traps and limitations

Application to employment income only: The big limitation is that it only applies to income derived from employment. This means that if you have investment, rental or dividend income in Spain, it will be taxed according to the standard non-resident rules, which usually implies higher tax rates (19%-24%).
Real estate income: If you own real estate in Spain and rent it out, you should be aware that rental income will not be covered by the regime. This means that real estate income will be subject to a higher tax rate (19%-24%) and you will not be able to take advantage of the reductions enjoyed by tax residents, such as the 60% reduction for renting a permanent residence.
Exclusion of deductions and reductions: Beckham Law beneficiaries are not eligible for tax deductions or reductions for large family, primary residence, or other autonomous deductions. This may result in a higher tax burden in other areas of personal life.

Wealth and Inheritance Tax: The Beckham Law does not exempt you from Wealth Tax or Inheritance and Gift Tax if you own property or shares in companies in Spain. This can be an important factor if you own high value properties or if your assets include shares in Spanish companies.

Beckham Law in Spain and its Impact on Investments and Corporations

However, if you have investments or a company in Spain, the Beckham Law may not be as attractive as it first appears. Although the regime offers a saving in personal income tax, there are tax implications to consider if you have interests in real estate or businesses in Spain.

Investments in Spain under the Beckham Law

As mentioned before, if you have investments in Spain, such as real estate or shares in companies, this income will not be covered by the Beckham Law regime. This means that, although your salary will be taxed at the reduced rate of 24%, your investment income will be taxed as non-resident income, at rates ranging from 19% to 24%. This can result in a much higher tax cost than if you were a tax resident in Spain.

What to do if you have a company in Spain?

If you own a company in Spain, you should know that the Beckham Law also has limitations. If you own a company and have more than 25% of its capital, you will not be able to benefit from the regime, since it is considered that you are exercising control over the company and that the income derived from it is not exclusively labor income.

Strategies to optimize your situation

Asset restructuring: If you plan to maintain a company in Spain, it is advisable that you evaluate the possibility of restructuring your assets, transferring your investments or the ownership of the company to a holding company. This can help you minimize the tax burden in the future, when the Beckham Law regime ends.
Long-term planning: The Beckham Law can be an excellent short-term tax strategy, but it is crucial that you plan beyond 6 years (or 10 if you are eligible). Consider how to organize your investments and business in Spain so that they remain efficient after the tax regime has ended.

Conclusion

The Beckham Law in Spain is an excellent tax opportunity for those who qualify, but it is not a universal solution. If you have investments or a company in Spain, it is essential that you understand the limitations of the regime and how it may affect your long-term situation. Proper tax planning, including restructuring your assets and managing your business, is key to making the most of this regime and avoiding unpleasant surprises in the future.

If you are considering the Beckham Law, I recommend that you consult with a tax expert to ensure that this regime fits your wealth and tax strategy optimally.

Frequently Asked Questions about the Beckham Law in Spain

Who is eligible for the Beckham Law?

Workers posted to Spain, managers, highly qualified freelancers and digital nomads who meet the requirements of not having been tax residents in the last 5 years and coming for work purposes are eligible for the Beckham Law.

What are the tax benefits of the Beckham Law?

The main benefits are the flat tax rate of 24% on salary up to €600,000 and the exclusion of foreign income, which saves a significant amount of tax if you have international income.

What rents are not covered by the Beckham Law?

Capital income, such as property rentals or investment income, is not covered by the Beckham Law and is taxed as non-resident income.

How long can I benefit from the Beckham Law?

The tax regime applies for 6 years, although some workers, entrepreneurs and researchers can extend it up to 10 years if they meet additional requirements.

What happens if I have a company in Spain and I am covered by the Beckham Law?

If you have a shareholding of more than 25% in a company, you will not be able to benefit from the regime. The Beckham Law only applies to employment income and not to income from companies in which you have a significant shareholding.

How do I apply for the Beckham Law?

You must apply for inclusion in the special regime within the 6 months following the start of your employment activity in Spain, by means of Form 149.

Taxation of the purchase and sale of homes: common mistakes

Sin categoría / December 1, 2025 March 11, 2026

Buying and selling a home is one of the most important transactions in many people’s lives, whether as an investment or as the purchase of a home. However, the process of buying and selling real estate involves not only the emotions and decisions typical of a large purchase, but also an important tax component. Understanding the tax aspects of home buying and selling is essential to avoid mistakes that can result in unnecessary payments or legal problems.

In this article, we’ll explore the most common home buying and selling tax mistakes, how they can affect your pocketbook and what steps to take to avoid them. From the taxes you must pay to the deductions you can apply, we provide you with a practical guide to ensure that your investment in the real estate market is as tax-efficient as possible.

Taxation of Home Purchases and Sales: Common Errors

The taxation of home sales and purchases involves a series of taxes that must be managed correctly to avoid negative consequences. Often, the most common mistakes arise from not fully understanding how taxation works in these transactions. Below, we explain the most common mistakes and how you can avoid them.

1. Not to take into account the Transfer Tax (ITP)

One of the most common mistakes is not to consider the Transfer Tax (ITP) when buying a second-hand property. This tax varies according to the autonomous community and is calculated on the purchase price of the property or the cadastral value, whichever is higher. The tax rate ranges between 6% and 10% of the purchase price depending on the region.

Tip: Be sure to include this expense in your financial planning before proceeding with the purchase, as it can represent a considerable amount.

2. Not claiming the Habitual Dwelling Reduction

If the property you are buying is going to be your primary residence, you may be entitled to a reduction in the ITP or in the Tax on Documented Legal Acts (AJD). However, many people do not apply for this reduction or do not meet the necessary requirements to benefit from it, which can result in a higher tax burden.

Tip: Before making the purchase, find out about the possible tax reductions that you can apply, either for permanent residence or for the specific situation of the property.

3. Disregarding Value Added Tax (VAT) on the Purchase and Sale of New Homes

When you buy a new home (directly from the developer), the applicable tax is the VAT, not the ITP. This tax is 10% on the price of the property (4% if it is a social housing). Many buyers make the mistake of thinking that VAT does not apply or of calculating it incorrectly.

Tip: If you buy a new home, make sure that VAT is correctly calculated and included in the total price of the property. This is an additional expense that should not be overlooked.

4. Forgetting Wealth Tax When Buying a High Value Home

The Wealth Tax may affect those who purchase high-value properties, especially if they exceed certain value thresholds. This tax is levied on the net worth of individuals, including property. If you purchase a high-value home, such as a luxury property or a rural estate, you may have to pay this tax.

Tip: Be sure to calculate the total value of your property and comply with the corresponding tax regulations. If the value of your property exceeds the established limits, you may have to pay this tax.

5. Failure to Anticipate the Impact of Personal Income Tax (IRPF) on the Sale of a Home

If you are the seller, one of the most common mistakes is not considering the impact of Personal Income Tax (IRPF) on the gains obtained from the sale. The capital gains you generate when selling a property are subject to IRPF taxation, as a capital gain. However, if the property you sell has been your habitual residence for the last three years, you can apply an exemption on the gain obtained.

Tip: If you are selling a property, make sure you are aware of the tax implications and possible tax benefits applicable, such as the exemption for the sale of your primary residence.

6. Disregarding Rental Housing Deductions

If you buy a property with the objective of renting it out, it is important to know the tax deductions available to landlords. In some autonomous communities, you can benefit from deductions for renting a primary residence or even for renting empty homes, which can reduce your taxable income and your taxes.

Tip: If you are buying a rental property, research the tax deductions available in your autonomous community to maximize your tax benefits.

7. Ignoring Tax Implications in the Case of Inheritances and Gifts

In the case of inheriting a home or receiving it as a gift, it is crucial to understand how the Inheritance and Gift Tax affects you. Many people do not realize the tax implications until it is too late, and may face unexpected payments for this tax. This tax varies depending on the value of the property and the degree of relationship to the deceased or donor.

Tip: If you are involved in an inheritance or gift of a home, consult with a tax specialist to understand the tax implications and exemptions available.

Conclusion

The taxation of the purchase and sale of homes is a complex issue that involves several taxes and regulations that vary according to the autonomous community and the situation of the property. The common mistakes we have mentioned can result in unnecessary payments or legal problems if not managed properly. It is essential to understand how the applicable taxes work and to plan strategically to avoid tax surprises.

Always remember to consult with a specialized tax advisor before buying or selling a property, either as buyer or seller, to ensure that everything is in order and to optimize your tax burden.

Frequently Asked Questions on Home Purchase and Sale Taxation

What is the Transfer Tax (ITP)?

This is a tax levied on the purchase and sale of second-hand homes. The tax rate varies according to the autonomous community and is calculated on the purchase price or the cadastral value, whichever is higher.

How much VAT is paid on the purchase of a new home?

VAT for the purchase of a new home is 10% of the purchase price (4% in the case of subsidized housing).

When is Wealth Tax paid on a property?

This tax applies to those persons whose net worth, including the value of their homes, exceeds certain thresholds established by tax regulations.

How does Personal Income Tax affect the sale of a home?

Gains obtained from the sale of a property are subject to taxation as a capital gain in the IRPF, but you can benefit from exemptions if the property has been your habitual residence.

What deductions are available for rental housing?

In some autonomous communities, you can benefit from tax deductions if you rent a property for its regular use. These deductions can reduce the taxable base and the taxes payable.

What happens with the taxation of housing in inheritances or donations?

If you inherit a property or receive it as a gift, you will be subject to Inheritance and Gift Tax, which varies according to the value of the property and your relationship to the deceased or donor.

What is the Exit Tax in Spain?

Sin categoría / November 29, 2025 March 11, 2026

Moving abroad seems to be an ideal solution for those looking for a quieter life or a better quality of life. However, if you are an entrepreneur, investor or someone with significant wealth, moving out of Spain could mean facing the dreaded Exit Tax. This tax, created in 2015, has generated concern among those who, after years of work and accumulation of wealth, decide to change their tax residence to another country.

In this article, we will explain what the Exit Tax in Spain consists of, how it works, what requirements you must meet and how it affects those with significant shareholdings in companies. In addition, we will give you practical advice on how to handle this tax and what steps to take if you find yourself in this situation.

What is the Exit Tax in Spain?

The Exit Tax is a tax that applies to individuals who decide to move their tax residence outside Spain and who meet certain wealth requirements. It was introduced in 2015 as part of the tax reforms, with the aim of preventing people who move abroad from avoiding taxes on the accumulated gains from their holdings in companies.

This tax is triggered when a person decides to move to a country outside Spain after having been fiscally resident in the country for at least 10 of the last 15 years. In other words, it does not apply to those who have recently arrived in the country, but to those who have been establishing their tax residence in Spain for a considerable period.

Who is affected by the Exit Tax?

The Exit Tax does not affect anyone who decides to relocate, but those with significant wealth, especially with respect to equity interests in companies. For this tax to be triggered, two main criteria must be met: tax residency and equity participation.

Tax Residency: For the Exit Tax to apply, you must have been a tax resident in Spain for at least 10 of the last 15 years before moving.
Participation in Companies: The Exit Tax mainly affects people who have important participations in companies. It applies when you have at least a 25% interest in a company whose total value exceeds 4 million euros, or if you have at least 1% in a listed company whose value exceeds 1 million euros.

For example, if you have a 25% shareholding in a company valued at 20 million euros (i.e. a shareholding of 5 million euros), the Exit Tax will be triggered when you move abroad. But if your stake in a 2 million euro company is only 25% (500,000 euros), the Exit Tax will not apply.

Exit Tax Latent Gain Calculation

The Exit Tax is based on the so-called “latent gain”, which is the increase in the value of the shares of a company from the time you acquired them until the time you move. This increase is considered a capital gain and is taxed as such.

The latent gain is calculated as follows:

Market value of the shares/units at the time of exit.
Acquisition value: the price for which you bought those shares.

This calculation can generate friction, especially in unlisted companies, where the market value of the shares is not so transparent and can lead to disputes with the tax authorities. It is important to have a proper valuation to avoid problems.

How much do you have to pay for Exit Tax?

The latent gain generated by the exit from Spain is taxed as a capital gain in the Personal Income Tax (IRPF), applying the tax rates corresponding to the savings base, which currently range between 19% and 23% for the lower brackets, and up to 30% for the higher brackets.

The payment is made in the year following the move, together with the IRPF declaration corresponding to the last year in which you were resident in Spain. For example, if you move in 2025, you will have to file the IRPF return in 2026 and include there the fictitious capital gain derived from the Exit Tax.

Exit Tax Deferral

One of the most interesting options of the Exit Tax is the possibility to defer payment. This means that you will not have to pay the tax immediately, but you can defer it until certain circumstances are met. This option is available for those moving to countries within the European Union (EU) or European Economic Area (EEA) with mutual assistance agreements on tax collection.

Some of the countries that allow this deferral are Portugal, Italy, Germany, Norway and Iceland, among others. However, countries such as Switzerland and the United Kingdom are not included in this agreement. The deferral has several advantages:

You pay nothing at the time of departure.
The debt is “frozen” as long as you live in an EU/EEA country.
You will only have to pay if:
1. You sell the shares.
2. You move to a country outside the EU/EEA.
3. It has been 10 years since your departure and you still reside outside Spain.

This deferral can be an interesting option if you intend to continue living in the destination country for a long period of time.

Return Rule: What Happens If You Decide to Return to Spain?

If you decide to return to Spain before 5 years have passed since your departure and you have not sold the shares during that time, the Exit Tax is annulled. This is known as the “return rule”, and allows the Exit Tax to be eliminated, as if it had never existed.

If you have already paid the tax, you are entitled to request a refund of the amounts paid. However, this process is not automatic. You will have to present specific documentation and prove that your holdings are still intact and that you have not made any transactions during your stay abroad.

Practical Advice on Exit Tax

Plan ahead: Before making the decision to move, it is essential that you consult with a specialized tax advisor to analyze the impact of Exit Tax and study the options for deferral or refund in case of return.
Keep your documentation organized: If you decide to opt for deferral or refund, you will need to submit detailed documentation to the Tax Agency. Lack of proper documentation may delay the process or result in penalties.
Evaluate the long-term situation: If you plan to return to Spain at some point, the return rule can be very beneficial, but make sure you meet the requirements to take advantage of it.

Conclusion

The Exit Tax in Spain can be a significant obstacle for those who decide to move abroad after having accumulated considerable wealth. However, with proper planning and the right advice, it is possible to manage this tax efficiently, taking advantage of deferral and refund options. If you are considering moving out of Spain, make sure you fully understand the tax impact and work with a professional to optimize your strategy.

Frequently Asked Questions about Exit Tax in Spain

Who is affected by the Exit Tax in Spain?

The Exit Tax affects individuals who have been tax residents in Spain for at least 10 of the last 15 years and who have significant shareholdings in companies. It is triggered when they move abroad.

How much do I have to pay for Exit Tax?

The Exit Tax is calculated on the unrealized gain on a company’s shares. This gain is taxed as a capital gain in the IRPF, with tax rates ranging from 19% to 30%, depending on the bracket.

Is it possible to defer payment of Exit Tax?

Yes, if you move to an EU/EEA country with a mutual collection assistance agreement, you can request deferral of payment without interest. Countries such as Portugal, Italy and Germany allow this deferral.

What happens if I return to Spain after moving abroad?

If you return to Spain within 5 years and you have not sold the shares, the Exit Tax is cancelled. If you have already paid the tax, you can apply for a refund.

How is the Exit Tax unrealized gain calculated?

It is calculated by taking the market value of the units at the time of exit and subtracting the acquisition value. The difference is considered a capital gain subject to taxation.

Which countries do not allow Exit Tax deferral?

Countries such as Switzerland or the United Kingdom are not included in the Exit Tax deferral agreement, so if you move to these countries, you will have to pay the tax immediately.

Asset-holding company: tax tool or dead-end trap?

Sin categoría / November 24, 2025 March 11, 2026

In the business and tax world, the asset-holding company is seen by many as an ideal way to protect assets and optimize taxes. However, what if I told you that, if not properly planned, the partnership could turn into a golden cage? A structure that looks safe and efficient on the outside, but limits your financial freedom and could expose you to higher taxes.

Today we are going to discover what an asset-holding company really is, how the Treasury interprets it, when it can be a brilliant tax tool and when, on the contrary, it can become a trap. Through real cases and clear examples, I will give you practical advice so that, if you decide to create one, you do it with a strategic and well-founded vision.

What is a Holding Company?

In simple terms, an asset management company is a legal entity created to manage the assets of an individual or family, such as real estate, land or financial investments. Instead of being managed individually, these assets are managed through a company with its own legal personality.

But what makes an asset-holding company so popular? The main attraction is its ability to isolate personal assets from business risks. In addition, depending on how it is structured, it can have tax advantages in taxes such as Corporate Income Tax (IS), Wealth Tax (IP) or Inheritance and Gift Tax (ISD).

However, the advantages are not automatic. The key is how the tax authorities classify and regulate this company according to the applicable taxes. It is not the same as a real company, which carries out an active economic activity, as an asset-holding company that only owns assets.

The Impact of Equity Partnerships on Corporate Income Tax (IS)

According to Article 5 of the Corporate Income Tax Law, an asset-holding company is one in which more than 50% of its assets are composed of assets that are not assigned to a real economic activity. This means that, if the company only owns real estate or passive investments and does not generate an active commercial activity, the Treasury will consider it as such.

What does this imply for your statement?

If your holding company is qualified in this way, you can still be taxed at the general rate of 25% in the IS. This can be advantageous if you generate high passive income and prefer to reinvest the profits within the partnership instead of distributing them to the partners, which would delay the IRPF taxation.

IS tax advantages

Fixed rate of 25%: This tax rate is generally lower than the maximum marginal personal income tax rate, which can be as high as 47% in some autonomous communities.
Accumulation of profits: You can leave the profits within the company to reinvest them without taxation until you decide to distribute dividends.
Deductibility of expenses: Expenses necessary for asset management (maintenance, consulting, etc.) are deductible from profit.
Asset protection: The assets managed by the company are separate from personal assets, which offers some protection against personal debts.

But where is the catch?

Although it seems like an attractive solution, asset-holding companies have several tax drawbacks that can end up being a problem if not managed properly. Some of these are:

Inability to apply reduced rates or tax incentives: Holding companies cannot benefit from incentives such as freedom of depreciation or deductions for small companies.
Limited loss carryforwards: If the company is considered an asset-holding company, you will not be able to take advantage of losses from previous years to reduce taxes.
Enhanced tax surveillance: Asset-holding companies are under increased supervision by the tax authorities, as they are often considered to be instrumental structures.
Absence of real economic activity: If the company cannot prove that it is carrying out a real economic activity (such as the active management of real estate), it loses many of the available tax advantages.

The Impact on the Wealth Tax (IP)

One of the key points to keep in mind when talking about partnerships is the impact of Wealth Tax. If the assets within the partnership are not affected to a real economic activity, you will have to include the value of the participations in your taxable base.

What does this mean?

If the assets are not “attached” to an economic activity, the Treasury will not apply any exemption in the Wealth Tax. As a result, owners of asset-holding companies that do not meet the economic activity requirements are forced to pay this tax on the value of their assets, which can be much more costly than if those assets were managed as an individual.

Inheritance and Gift Tax (ISD) and Wealth Management Companies (Sociedades Patrimoniales)

Inheritance and Gift Tax may also be affected if you inherit an estate company. If you cannot prove that the company carries out a real economic activity, you will not be able to benefit from the 95% or 99% reductions that apply to family businesses.

What are the consequences?

If you inherit an estate partnership that is not active, you will have to pay much more in taxes than if you had inherited the assets directly as an individual. This can significantly reduce the value of the inherited estate and, in some cases, rob the heirs of expected benefits.

Personal Income Tax for Partners and Income of the Equity Partnership

If you receive dividends from an asset-holding company, these are taxed in the savings base, which may be favorable depending on your personal tax situation. However, this is not always enough to justify the creation of an asset-holding company, especially if you want to sell any assets or distribute profits, as you could incur in double taxation.

Double Taxation

When the partnership sells a property or asset, the IS is applied on the profit obtained. Then, if you decide to distribute those profits to you as a partner, you will be taxed again in the IRPF. This double taxation can make the creation of an asset-holding company not as beneficial as it may seem, especially if the assets are to be sold or liquidated in the future.

When is it convenient to have an Equity Partnership?

Despite the risks and disadvantages, a holding company can be a useful tool in certain cases. Here I indicate when it makes sense to create one:

To centralize asset management: It is especially useful in families with many real estate assets or investments.
To isolate patrimonial risks: If you are looking to protect real estate or assets against possible personal claims.
When high passive income is generated: If your company generates passive income (such as rents), it may be more beneficial to be taxed under IS rather than IRPF.
As a stepping stone to a holding structure: A holding company can be a key part of a larger tax optimization strategy.

Example of appropriate use: A family with 10 rental properties decides to manage them through an asset management company. They are taxed in the IS at 25%, which is much lower than if they were taxed in the IRPF (up to 47%).

When does it become a Trap?

An asset-holding company can become a tax liability if:

It is created only to “pay less tax”: If you do not analyze the impact of the partnership on other taxes, you may end up paying more in the future.
If you want to sell assets: When selling a property, you will be taxed twice: in the IS and in the IRPF.
If you limit inheritance or estate tax benefits: Lack of economic activity may cause you to lose tax advantages.
If the management costs outweigh the tax benefit: If the holding company becomes a costly administrative maze without providing sufficient tax benefits, it is time to reconsider the strategy.

Example of a trap: A private individual puts his only apartment in a holding company and sells it years later. He pays 25% IS and then pays IRPF when he receives the money, which results in a higher tax bill than if he had sold as an individual.

Conclusion

Asset-holding companies are useful tools, but only if they are properly managed and adjusted to the fiscal reality of each case. Like any tool, their effectiveness depends on how and when they are used. It is essential to make a prior diagnosis, carry out tax simulations and review the strategy annually to prevent the asset-holding company from becoming a tax burden.

If you are considering creating an asset-holding company, always consult with a specialized advisor to ensure that this decision is the most appropriate for your tax situation.

Frequently Asked Questions about asset-holding companies

What is an asset-holding company?

It is a company used to manage the assets of a person or family, such as real estate, investments or land.

What are the tax advantages of an asset-holding company?

Taxation at a fixed corporate income tax rate of 25%, the possibility of accumulating untaxed profits until they are distributed, and the deduction of certain management expenses.

What are the tax disadvantages of an asset-holding company?

They cannot benefit from tax incentives or reduced rates, loss offsetting is limited and there is a higher risk of inspection by the tax authorities.

How does the Wealth Tax a patrimonial company?

If the assets are not used in an economic activity, you will have to pay tax on their value as part of your taxable income.

What happens to the successions of an estate partnership?

If no economic activity is demonstrated, you will not be able to benefit from the tax reductions in the Inheritance Tax and you will have to pay more taxes.

When is it advisable to have an asset-holding company?

When you want to centralize asset management, isolate asset risks, generate high passive income or as a preliminary step to a holding structure.

Corporate income tax: what your accountant is not telling you

Sin categoría / November 17, 2025 March 11, 2026

In the business world, taxes are often seen as a burdensome obligation, something you have to pay to avoid penalties and legal problems. But what if I told you that taxes, and in particular Corporate Income Tax, can be much more than just a financial burden? What if, with the right knowledge, you could use this tax to your advantage?

In this article, we’ll dive into the essentials of corporate taxation and explore how a thorough understanding of it can help you make smarter decisions, reduce costs and even optimize your finances. Whether you’re a small business owner, self-employed with an SL, or managing a family business, this guide will provide you with the knowledge you need to navigate the complexities of business taxation and avoid common mistakes.

So, get ready, because we’re going to start by looking at the basics of Corporate Income Tax and why it’s crucial to understand what your accountant might not be telling you.

Corporate Income Tax: What is it?

Corporate Income Tax is a tax levied on the income of companies and other legal entities resident in Spain, i . e. all companies, even those that have had no activity or have closed the year with losses, are obliged to file Form 200. That is to say, all companies, even those that have had no activity or that have closed the year with losses, are obliged to file form 200. This also includes asset-holding companies, created to manage real estate, passive income or family structures.

The key date to file this tax is July 25, if your fiscal year coincides with the calendar year. Although it may seem like just another administrative procedure, it has very important implications. It is common for many businessmen to sign the tax return without reading it carefully, which can lead to losing deductions, paying more than they should or, even worse, incurring in tax risks without realizing it.

One of the most common confusions is the difference between accounting result and tax result. It is essential to understand that accounting is only the starting point for calculating corporate income tax, but it is not the final result. In order to arrive at the taxable base, on which the tax will be applied, it is necessary to make a series of mandatory tax adjustments.

Practical advice: Always ask your accountant for a detailed simulation that compares the accounting result with the tax result, making sure that everything is correctly interpreted.

Deductible Expenses That Are Often Forgotten (And Can Save You A Lot)

One of the most common mistakes when filing corporate income tax returns is not taking advantage of all deductible expenses. Why does this happen? Because many advisors use standard templates without customizing them according to the activity of each company. However, a thorough review of each expense item can legally optimize the taxable base and generate considerable savings.

The first thing you should know is that without an invoice, the expense is not deductible. This is crucial. It is not enough to have a bank receipt; for the tax authorities to recognize an expense as deductible, it must be supported by an official invoice.

Some of the most common expenses that are often overlooked include:

Financial expenses: Interest on mortgages or loans used to finance property or the business.
Supplies and maintenance expenses: Repairs to property or facilities.
Professional fees: Consultants, lawyers, technical services.
Training expenses: Courses and management software related to the business activity.

One of the most debated is the administrator’s remuneration. If this remuneration is not properly documented, approved at the meeting and foreseen in the bylaws, it will not be tax deductible, which could cause problems when filing the tax return.

Practical tip: Always do a regular review of expenses and ask your accountant if everything is correctly deducted. Otherwise, you could be losing a lot of money.

Deductions and Offset of Negative Taxable Bases (BIN)

Negative Taxable Income (NII) is an incredibly valuable tax resource that often goes unnoticed. If your company has had losses in previous years, you can offset them in future years. This means that, if in 2020 you had losses for 15.000€, and in 2023 you obtained 12.000€ of profit, you could be taxed only for 0€ and the remaining losses (3.000€) will be offset for the following year.

It is important to note that, although losses can be offset in subsequent years, you must keep a detailed control of them. If you do not have the losses well documented, you could lose the right to offset them.

An important detail is the time during which you must keep the documentation: according to the law, you must keep it for at least 6 years. However, if you are compensating a BIN, the Administration can review them up to 10 years after declaring the loss.

Practical recommendation: Make a review of your company’s accumulated losses and make sure that all supporting documentation is organized and available for future inspections. Keep invoices and tax documents well stored and digitized.

Risk Situations or Frequent Errors

Errors in the filing of Corporate Income Tax can result in penalties, tax reviews and even significant financial losses. Some of the most common errors include:

Companies that invoice but do not pay taxes correctly: Sometimes expenses are manipulated to reduce profit without justification or traceability, which is a serious error.
Expenses not related to the activity: It is important that the expenses are directly linked to the activity of the company, otherwise the tax authorities will not consider them deductible.
Poorly documented director’s compensation: If it is not properly recorded, it will not be deductible and could generate adjustments.
Errors in the payments on account: If the installment payments are not made correctly, the final tax liquidation may be misaligned.
Incorrect valuation of real estate or misapplied provisions: This error is especially critical in asset-holding companies.

Practical tip: Always make sure that expenses are well justified and do not leave anything to chance. Having a specialized tax advisor can prevent many of these mistakes.

News, Opportunities and Future Planning

The best strategy is not to wait until the last minute to file corporate income tax, but to plan ahead. Important tax decisions should be made before the end of the year, as some of them have effects on the following fiscal year.

For example:

Amortizations: You can simulate different scenarios to see which is more fiscally profitable.
Director’s compensation: Must be agreed upon and documented prior to fiscal year-end.
Real estate investments: They could be more profitable if you plan them for the beginning of the new fiscal year.

In addition, in some regions such as Catalonia, tax reforms have been implemented that affect the taxation of real estate. It is crucial to be aware of these reforms in order to make informed decisions.

Practical tip: Start reviewing your accounting as early as September to make sure everything is optimized for the fiscal closing and don’t leave everything until December.

Conclusion

Corporate Income Tax is not just a bureaucratic procedure, but a powerful tool that, if managed correctly, can help you optimize your tax burden and save money legally. It is not about avoiding taxes, but about taking advantage of all the benefits that the tax legislation allows. Make sure you work with a specialized accountant who understands not only the accounting, but also the tax complexities.

If you have a company, review the expenses, demand all the invoices and consult with a tax expert who not only manages but also advises you on how to optimize your tax return. Legal savings start with foresight.

Frequently Asked Questions about corporate income tax

Who must file corporate income tax returns?

All companies, including those that have had no activity or losses, must file Form 200.

How do I know if I am losing tax deductions?

Review all your expenses and make sure that each one is properly documented with an invoice. Ask your accountant for a simulation comparing the accounting and tax result.

What are Negative Tax Bases (BIN) and how are they applied?

These are tax losses from previous years that can be offset against future profits. You should keep a detailed control of them and make sure that all documentation is properly kept.

How long should I keep the tax documents?

According to the Commercial Code, documents must be kept for at least 6 years. However, tax losses can be reviewed by the tax authorities for up to 10 years.

How to avoid common mistakes in the corporate income tax return?

Make sure that all expenses are deductible, make installment payments on time and verify that the administrator’s compensation is properly documented.

What tax developments should I be aware of for 2025?

Review the tax reforms of your autonomous community, especially if you manage real estate. Also, plan your amortizations and investments in advance to take full advantage of tax benefits.

Constituir una sociedad limitada en 10 días

INCORPORATE A LIMITED COMPANY IN 10 DAYS

Sin categoría / February 22, 2023 March 11, 2026

Starting an economic activity and incorporating a limited liability company for this purpose is now within the reach of many more people, as the capital contribution limits are reduced, as well as the costs and time to have it operational.

The Crea y Crece Law aims to facilitate the creation of companies (corporations) by reducing the bureaucratic procedures and the incorporation time to 10 days, without having to make a deposit of 3,000 euros for it.

NOW FASTER AND DOES NOT REQUIRE CAPITAL CONTRIBUTION

To incorporate a Limited Company (with the traditional method), it is mandatory to make a minimum capital contribution of €3,000. This money remains blocked in the bank account until the deed is formalized, which can sometimes take weeks. The fact of having to make this investment at the beginning can sometimes limit the start of a project. By eliminating this requirement, this financing is no longer necessary, giving free rein to entrepreneurship through companies.

On the other hand, the time to have a business operational is reduced to 10 days. The point where it takes the longest in the bureaucratic procedures is in the notary signature and the subsequent registration of the company in the Commercial Registry. Sometimes it can take up to 4 weeks or more to complete these formalities. The main reason is usually the difficult availability of these professionals.

incorporation of a limited liability company without physical presence

The notaries have committed to provide service through video conference, being necessary for the signature the Digital Certificate, without having to appear physically.

This point is extremely important precisely for those foreign investors who wish to have a business in Spain. They will save a lot of costs by not having to travel, as well as time to get the business up and running.

This eliminates bureaucratic hurdles and reduces the waiting time to register an activity through procedures that allow the creation of companies entirely digitally.

To do this you simply have to request an appointment through the citizen portal, which is the Electronic Headquarters of the notary’s office. From there you will be assigned a notary who is free and with whom you will initiate a video conference without the need to physically go to the office.

This will verify the veracity of the identity of the founding partner or partners. In addition, he will check the contribution of the capital required for the incorporation of the company according to the law and will review that all the points of the statutes are correct. Once this process is finished, and giving the approval, the notary will send the deed telematically to the Mercantile Registry and a copy of it to the founding partner, digitally certified.

REQUIREMENTS TO INCORPORATE A LIMITED LIABILITY COMPANY

Self-employed persons who have opted to incorporate a limited liability company under this law must comply with certain obligations:

They must set aside 20% of their profits to cover the €3,000 share capital of a limited liability company.

If they have to liquidate the business and have not been able to accumulate that amount (€3,000), the partners must respond until they reach it, since the Share Capital is established to protect the creditors.

The incorporation formalities must be carried out through CIRCE (Information Center and Business Creation Network).

Electronic invoices must be issued and sent in all commercial relations with companies and self-employed workers, which will guarantee greater traceability and control of payments.

Companies that do not comply with the payment deadlines established in the Delinquency Law will not be able to access a public subsidy or be a collaborating entity in its management.

If you need more information about this process, you can request it from HERE. Thank you

Kit digital. ¿Necesitas financiación y que además sea gratuita?

DIGITAL KIT FOR SMES AND FREELANCERS. BOOST YOUR BUSINESS.

Entrepreneurship / November 7, 2022 March 11, 2026

The digital kit for SMEs and freelancers: everything you need to know.

If you are self-employed and/or have an SME, and you still haven’t heard about the proposal called KIT Digital, or you don’t know what you have to do to apply for it, keep reading, this is of interest to you, and very much so!

Do you need financing to give your business a boost?

Or simply to improve sales?

Then don’t miss this opportunity to get it for free and without having to reimburse anything!

WHAT IS THE DIGITAL KIT for SMEs and the self-employed?

In 2022, with the aim of supporting the digitalization of small and medium-sized companies, as well as the self-employed, the KIT Digital initiative has been launched. This is a public financial aid program, in order to implement digital solutions in businesses.

These grants are financed with “Next Generation EU” funds and have a generous but limited budget. They will be prioritized and awarded on a first-come , first-served basis.

WHAT DO I GET WITH THE DIGITAL KIT

The beneficiaries will receive such assistance in the form of a “redeemable voucher” with a maximum amount established according to the following:

Segment I: Small companies with 10 to 49 employees – 12,000 euros

Segment II: Micro-companies with 3 to 9 employees – 6,000 euros

Segment III: Micro-companies with 1 to 3 employees and self-employed 2,000€.

If you have a more traditional business and you think this is not for you, you are missing an opportunity to improve aspects of it. Whether it’s making yourself known, reaching new potential customers, or implementing systems and automations. Ask for more information on how you can boost your business through the more than one hundred services available, for all levels.

On November 20, the deadline for the third and last call was opened, and with it all self-employed and small companies with less than 3 workers could apply.

WHAT ARE THE STEPS TO FOLLOW

1. To apply for the Digital Kit for SMEs and freelancers it is necessary to previously perform a test-diagnosis to detect the level of digital maturity from the page https://www.acelerapyme.gob.es/. To do this you will have to register first.

1. The report obtained must be attached to the application submitted through the website https://red.es/es.

1. Once the Administration has checked that the requirements for accessing the digital voucher have been met, the self-employed/company is notified of the resolution. From this point on, the company has 6 months to choose both the service and the Digitalizing Agent (supplier).

Both the services and the companies in charge of implementing them (digitizing agents) are listed on this website.

services covered by this assistance

The services available fall into the following categories:

- Website and Internet Presence

- Ecommerce + Ecommerce

- Electronic Invoice

- Customer Management

- Business Intelligence and Analytics

- Social Media Management

- Process Management

- Cybersecurity

- Virtual Office services and tools

- Secure communications

- Advanced Internet presence

- Marketplace

Once the service and the Digitizing Agent have been chosen, the latter has 3 months to implement it. Once this process is completed, the Digitizing Agent issues the invoice and delivers it to the client (self-employed/company). Several aspects become relevant here:

The voucher only covers the expense, so the VAT will have to be paid to the supplier and subsequently deducted in the VAT self-assessment. So, as a general rule, VAT is not an expense. It is only a cash flow.

At no time is money received so that it can later be paid to the Digitizing Agent, butthe voucher is redeemed.

The chosen service may have a price higher than the amount assigned in the Digital Voucher. When the quotation is presented to you by the Digitalizing Agent, you will have to decide whether to accept it. In this case the difference has to be assumed by the client (self-employed/company).

Example: a service worth €3,000 is chosen and only one voucher worth €2,000 has been granted. The €2,000 voucher is redeemed and the remaining €1,000 is paid by the self-employed person/company.

Finally, it should be noted that, being an aid, it is subject to possible revisions (inspections). It is advisable that all documentation related to it (not only the invoice) be kept for at least 4 years.

If you are interested in providing this type of services and want to become a Digitalizing Agent, you can consult the requirements and information in this link.

And if you want more information about this post, or you want us to help you with the whole process, contact with us HERE.

cuota autónomos reducida vs tarifa plana

REDUCED SELF-EMPLOYED QUOTA. The end of the “flat rate”.

Social Security / October 24, 2022 March 11, 2026

In 2023, the flat rate will disappear and the reduced self-employed quota will come into force .

What is more interesting: to become self-employed before the end of 2022? or to do it better in 2023?

Well, I hate to say it…but, it depends.

Whether you are thinking of registering your activity before the end of 2022, or if your intention is to do so from 2023, this post is of interest to you! I will explain the differences, especially economic, and what are the implications of this new regulation.

Be on the lookout, as these differences can mean savings… or, on the contrary, higher costs.

The Social Security contribution rebate, also known as Flat Rate, will disappear at the end of 2022, and the self-employed who have applied for it before December 31, 2022, will not be able to benefit from the Reduced Rate (reduced self-employed quota), which is economically more profitable for those entrepreneurs whose net income does not exceed the SMI.

There is no Waiver option. However, the conditions will be respected and will continue to be subject to it.

From 2023, for new entrepreneurs (or those who resume an activity), will enter into force the reduced self-employed quota, which is a new bonus and consists of paying € 80 fixed for two years, provided that during the second year, the income of the self-employed does not exceed the current SMI ( currently at € 1000/month with 14 annual payments). If this is the case (exceeding the SMI in the second year), you will have to pay the corresponding contribution according to your actual income during this second year.

The 80€ fee is applicable without this requirement for the first year only !

Looking at it with numbers, the Reduced Rate ( 80 fixed for 24 months: Total 1.920€) is more economical compared to the current Flat Rate, which is progressive (69€ for 12 months, 147€ for 6 months and 205,8€ for 6 months: Total 2.944,8€) for those whose net income during the second year of activity does not exceed the SMI.

The difference is approx. 1.025€.

If during the second year the SMI is exceeded, the situation is just the opposite, the amount would even be exceeded. There would be no savings whatsoever in terms of the cost of the Social Security contribution during the second year, and during the first year it would even be a little more expensive (€132). That is to say, approximately €1,157 would be lost as a bonus, increasing the expense by the same amount.

TWO VERY IMPORTANT ASPECTS:

0€ quota for self-employed workers in Madrid, Andalusia and Murcia

These three communities have announced that they will subsidize the totality of the Social Security contributions of their new self-employed as from 2023 (upon request and fulfilling certain requirements) during the first 24 months. For the second year, the subsidy of €0 fee is maintained, if the Reduced Rate is still in force. That is, it is subject to the same condition that the Net Income does not exceed the SMI.

Men under 30 and women under 35.

With the Flat Rate that remains in force until December 31, this group enjoys a 30% bonus without any conditions regarding their Net Income during their 3rd year of entrepreneurship. At this point in time, there is no news that this bonus will be maintained as it is. With the Flat Rate you have the certainty that you will pay during:

12 months: 69€.

6 months: 147€.

18 months: 206€.

To help you get out of this mess and make a decision, here are the following questions:

Will you be able to cover your needs with only 1.166€/month?

Are you willing to take the risk and let yourself be conditioned for the next few years?

Will you limit your business growth just to fit the SMI metric?

If your forecasts and expectations as self-employed for the second year of activity (2024), do not exceed €1,166/month of net income, the reduced self-employment fee is in your favor. Otherwise, it is in your interest to register before the end of 2022 (remember that with this management we can help you at a cost of 0€).

At this point, I insist on the importance of doing a good financial planning and follow up. If you need help with this task or with your discharge, I remind you that you can request a Consultancy and work hand in hand with me on this part. Request it HERE

The new contribution system based on real income creates a communication bridge between the Social Security and the Tax Agency. The regulations provide for reviews by the competent bodies, so that, if the case arises of having benefited from the Reduced Rate and subsequently, your economic results indicate that you did not meet the requirements for it, that money would be claimed back and would have to be returned.

Such an unpleasant situation can be avoided by managing your finances.

If you are thinking of registering in the next few months, invest time and/or money and make your economic forecasts for the medium-long term.

And finally, I also insist on the importance of creating profitable and sustainable businesses, as well as having those personal economic needs covered. Needs that for each person are different and increasingly more so.

Thanks for reading and I hope this post has been helpful!

CORPORATE INCOME TAX. NEWS 2021

Prosecutor / June 28, 2022 March 11, 2026

There are only a few days left to reach the middle of this year 2022 and also to start the filing of the 2021 Corporate Income Tax, a date eagerly awaited by the team of Asesoría y Consultoría Fénix and its clients.

Surely you are interested in the novelties for this year, and I am going to reveal them step by step.

First…

What is Corporate Income Tax?

The figure of the self-employed is not the only legal figure, there are many more. And if a self-employed person declares the “accounts” of his activity in the Income Tax Return, the companies and other entities do it through the Corporate Tax.

If you have landed on this page by chance or are simply looking for information about this tax, you should know that it is a personal and direct tax levied on income obtained by companies and other legal entities residing in Spanish territory.

It is structured around the accounting and the determination of the accounting result of the company or organization. It represents the starting point for determining the taxable income and the amount to be paid annually.

What is the deadline for submission?

Once this association has been made, you should know that the deadline is much shorter, in this case it is a little more than three weeks to file the Corporate Income Tax. Starts July 1, 2022 and ends July 25, 2022.

The Corporate Income Tax Return is made by filing Form 200, and Form 220 if it is for groups of companies.

How is the taxable income calculated?

To obtain the amount to be paid for corporate income tax, the difference between the income obtained and the expenses incurred in the year must first be calculated.

To this result, also called Operating Result, corrections or adjustments are applied due to existing differences, if applicable, and we will obtain the previous taxable income.

If there are negative taxable bases from previous years (losses to compensate), they can be subtracted at this moment, and thus we will obtain the taxable base. The only thing left to do is to apply the tax rate to obtain the total tax liability.

The allowances and deductions to which we are entitled can be deducted from this total tax liability. Finally, applying the withholdings and payments on account supported (if any) the differential quota would be obtained. This amount represents the payment that will have to be made to the Treasury.

How much tax is paid?

One of the main reasons why companies, or other legal entities, are attractive is the tax advantage. That is to say, the tax burden is lower compared to that of a self-employed person, if certain limits are exceeded.

There are several tax rates (percentages):

General tax rates of 25% for: Credit cooperatives, rural savings banks, general mutual insurance companies, mutual guarantee companies, political parties, mutual benefit societies, communities owning neighboring forests in common hand.

Special tax rates:

Micro-companies and small entities: 25%.

Newly created entities: 15% applicable in the first tax period in which the taxable income is positive and in the following period.

Fiscally protected cooperatives: 20% (extra-cooperative results will be taxed at the general rate).

Non-profit entities that apply the tax regime provided for in Law 49/2002: 10%.

Investment companies and funds and bank asset funds: 1%.

What are the implications of paying the tax?

If the result has been positive (there have been profits) it implies the obligation to present the Form 202, which represents the payment in installments of the Corporate Income Tax. That is to say, a payment on account for the next fiscal year. This model is presented and paid during the months of October, December and April (following year).

The rate or percentage to be applied in installment payments (in general) is 18% of the amount paid on Form 200.

Which accounting books are required to be filed?

As you have been able to see, we have not finished yet. Companies and entities obliged to pay corporate income tax are also obliged to keep accounting books:

Journal, which chronologically records the amount of all transactions.

Inventory and annual accounts book, which opens with the company’s initial balance sheet and periodically (quarterly) collects subsequent trial balances.

Corporate books such as the minute books, nominative shares and the partners’ registry book.

What are the novelties in the Corporate Income Tax for this fiscal year 2021?

One of the main tax innovations included in the General State Budget Law for the year 2022 is the minimum taxation in I.S. for certain companies. Specifically it is 15% for:

Those with a net turnover of 20 million euros or more during the 12 months prior to the date on which the tax period begins.

Those taxed under the tax consolidation regime.

In any case, the liquid quota (another novelty), previously called differential quota, cannot be less than the result of applying 15%. There are also exceptions and that is why we recommend asking for help in this type of management to professionals and specialists.

The Fénix Advisory and Consulting team will be happy to provide you with the help you need. To contact us, you can do it from HERE.

And finally… Would you be interested in a post where I talk about the main differences between the figure of the Self-Employed and that of a Company?

And by the way, which one is more interesting, and when?

I read you in the comments. Thanks for making it to the end.