Is there a new corporate tax increase?

Is there a new corporate tax increase?

In the last few weeks there has been a huge outcry regarding the possibility of a new corporate tax reform. But, do you know how this change really affects to your company? We explain it to you down below.

The new model of corporate tax would have as target to reduce the public deficit under the 3%”

What is the corporate tax?

We’ll start explaining what is the corporate tax. It is a tribute that taxes the income of the companies and legal entities resident in Spain (the opposite of IRPF that taxes the individual persons). This tribute depends essentially on the accountancy of a company (which will determine the tax base and the amount to pay) and must be paid off within the following 7 months of the end of the financial year. In our country, most of the companies do the closure the 31st December, so the limit to do the payment ends on July (of the following year). Moreover, the companies must do payments on account during the fiscal year.

Which will be the changes in the corporate tax?

 

In terms of the announced change some days ago, we must highlight that it is only a proposal presented by the caretaker government and that it must be approved, in that case, when the government is officially stablished (as well as from Brussels).

This measure won’t affect the self-employed workers, micro SME and SME but it only will impact mainly on big companies of the private sector. “An amendment of the payments on account of the corporate tax, stablishing a minimum type from a certain threshold”, according to Luis de Guindos.

As we indicated above, under current regulations, the companies must do payments on account of the tax during the fiscal year and there it is where there will be changes when the proposal will be approved.

The main innovation that it is proposed with the new corporate tax has to do with the way of doing the payments by the companies

The thing proposed is to increase the fractioned payments that the companies quarterly do with the target of “financing” the state and its deficit compromises. This increase in the payment would suppose that, in the annual declaration of the tax, the amount is reduced or even returned to those companies.

With this implementation, the minimum type of the corporate tax fractioned payment could be placed in at least the 20%.

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