Corporate Income Tax
|Type of Tax||Direct|
|Collected by||Regional Government|
|Tax base|| |
|Reductions in the base||There are different reductions. For more information check out the Summary table.|
|Net Tax Base||Calculated by subtracting the corresponding reductions from the Tax Base.|
|Tax Rate||Generally, 24%; for micro and small enterprises, 20%. For more information check out the Summary table|
|Tax Fee||Calculated by applying the Tax Rate to the Net Tax Base.|
|Deductions||Among others, those resulting from promotion of R&D (Research and Development). Check out the Summary table|
|Amount to pay||Calculated by subtracting the corresponding deductions from the Tax Fee.|
Company Tax is a direct personal tax. In the Basque Autonomous Community, in accordance with the Economic Accord, the Regional Governments are responsible for collecting this tax; i.e., the Regional Governments of Araba, Bizkaia and Gipuzkoa.
What is this tax levied on?
Company Tax is levied on the income, i.e. the profits obtained by the taxable parties. This tax is paid by commercial corporations on the profits obtained, and is calculated on the basis of those profits.
How is calculated the amount to pay?
In order to calculate how much the Legal entities have to pay, see in the table above the following concepts: Tax base; Reductions in the base; Net Tax Base; Tax Rate; Tax Fee; Deductions; Amount to pay.
Domingo Azpiri SL, a company located in Durango, sells plumbing material and has a workforce of 60. The company had the following income and expenses:
- purchase of products: 115.000 €
- sales: 308.000 €
- wages and payroll: 122.000 €
- sale of a commercial local: 25.000 € (when purchased, the commercial local came to 19.000 €).
Does it have to pay Corporate Income Tax? How much? What is this company's net profit?
Firstly, we need to analyse whether the company has had any profits. To do this, we calculate the difference between income and expenses. In this case:
- Income: 314.000 € (308.000 + 6.000)
- Expenses: 237.000 € (115.000 + 122.000)
- Gross Profit: 77.000 € (314.000 - 237.000)
- Given that it has no applicable reductions, we look up the Tax Rate corresponding to this company. In this case, the rate to be applied is 24% (not the 20% because it is not a small enterprise, in which the workforce is less than 50).
- Tax Free: 18.480 € (24% de 77.000€)
- Corporate Income Tax to be paid: 18.480 €
- Net Profit: 58.520 € (77.000 - 18.480)