New corporate tax rates: key aspects every company should know from 2025
Legal framework of corporate tax rates
Law 27/2014 of 27 November on Corporate Income Tax (LIS) has introduced a major reform of corporate taxation in Spain.
One of the central elements of this reform is found in Article 29, which regulates the tax rates applicable to taxpayers.
In addition, Transitional Provision 44 establishes a temporary regime for gradual implementation of these rates for financial years between 2025 and 2029.
This system combines a general consolidated rate of 25% with specific tax incentives for small entities, microenterprises and newly created companies, aimed at boosting competitiveness and entrepreneurship.
General corporate tax rate
The general rate is set at 25%, applicable to most taxpayers.
This simplification provides regulatory stability for larger companies or those with significant turnover.
1. Tax rate for microenterprises
One of the most relevant changes affects microenterprises, i.e. those with a net turnover below €1 million in the previous financial year.
Article 29 establishes a progressive rate based on turnover:
17% on the first €50,000 of taxable income.
20% on the remainder.
This system provides tax relief for microenterprises, which generally operate with narrower margins, thereby supporting consolidation and growth.
2. Tax rate for small entities
Entities meeting the requirements of Article 101 of the LIS (with net turnover below €10 million) will be taxed at 20%, unless otherwise provided.
However, this reduced rate cannot be applied by holding companies.
3. Tax rate for newly created entities
To encourage entrepreneurship, the law sets a reduced rate of 15% during the first two financial years with positive taxable income.
Exclusions apply to:
- Companies continuing the activities of linked entities or individuals with significant shareholdings.
Companies forming part of a corporate group under Article 42 of the Commercial Code.
This ensures the benefit is reserved for genuine new ventures.
Exclusions from reduced rates
The reduced rates of 15%, 17% and 20% do not apply to holding companies, as defined in Article 5.2 of the LIS.
Transitional regime of corporate tax rates (2025–2029)
Transitional Provision 44 of the LIS sets out a gradual adaptation mechanism for microenterprises and small entities between 2025 and 2029.
Specifically, this transitional regime establishes the following implementation schedule for these new tax rates:
From 2025:
Micro-enterprises whose net turnover in the previous period was less than €1 million:
- 21% on the first €50,000 of taxable income.
- 22% on the excess of said base.
- Small entities whose net turnover in the previous period was less than €10 million: 24%.
From 2026:
- Microenterprises:
- 19% on the first €50,000 of taxable income.
- 21% on the excess of said base.
- Small entities: 23%.
From 2027:
- Microenterprises:
- 17% on the first €50,000 of taxable income.
- 20% on the excess of said base.
Small entities: 22%.
From 2028:
- Microenterprises:
- 17% on the first €50,000 of taxable income.
- 20% on the excess of said base.
- Small entities: 21%.
From 2029:
- Microenterprises:
- 17% on the first €50,000 of taxable income.
- 20% on the excess of said base.
- Small entities: 20%.
Conclusions on the tax reform
The combination of Article 29 and Transitional Provision 44 of Law 27/2014 reflects a dual strategy:
Consolidation of the general 25% rate.
Targeted tax relief for microenterprises, small entities and new companies.
In short, this reform seeks to balance tax revenue with investment promotion and competitiveness of smaller businesses in Spain.
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