Corporate Income Tax in Spain – 2026: New Rates for Micro-Companies and SMEs

From January 2026, Spain will introduce a phased reduction of Impuesto sobre Sociedades, that is, corporate income tax, for micro-enterprises and small companies. This will affect both the final annual corporate tax liability and the amount of advance payments due during the year. These changes are part of a broader policy to support small and medium-sized businesses and effectively create a softer and more predictable tax environment for smaller companies in the coming years, which is why it already makes sense to factor them into financial and tax planning.

In this context, micro-enterprises are companies with turnover in the previous tax period of less than €1 million that are not classified as a sociedad patrimonial, meaning an “asset-holding company” whose activity mainly consists of holding assets and earning passive income rather than conducting genuine operating business. Small companies, or entidades de reducida dimensión, literally “entities of reduced size” and a special tax category for SMEs, generally include businesses with turnover of up to €10 million, provided they meet the criteria established in the Corporate Income Tax Law. For other companies, the general 25% rate continues to apply unless a special regime is available.

Before the reform, the tax burden for smaller companies differed only slightly from the general regime. In 2024, micro-enterprises were generally taxed at 23% on their entire tax base. Starting in 2025, a progressive scale was introduced for them: 21% on the first €50,000 of taxable income and 22% on the remainder. Small companies in 2025 applied a 24% rate, only one percentage point below the general rate. At the same time, a preferential 15% regime existed for new companies and start-ups that met the requirements for empresas emergentes, meaning innovative or high-growth start-ups, applied in the first tax periods with a positive tax base.

From 2026, a more noticeable reduction begins. For micro-enterprises, a progressive scale will apply with a 19% rate on the first €50,000 of taxable income and 21% on the remainder. Further easing is planned in subsequent years, with lower rates on the first income bracket and a gradual reduction of the upper rate as well. In practice, this means that even with moderate profits, the effective tax rate for micro-companies will be significantly lower than a few years ago. For example, if a company has a tax base of €80,000, under the former flat 23% rate it paid tax on the entire amount at one rate, whereas under the new system a substantial portion of profit is taxed at a reduced rate, producing real savings.

For small companies with turnover between €1 million and €10 million, a 23% rate will apply in 2026, with a gradual reduction in the following years down to 20% by the end of the reform period. As a result, the gap between the tax burden of large and small businesses will gradually widen in favor of the latter, which should improve the investment capacity and resilience of smaller companies.

The changes affect not only the final calculation in the annual return but also the system of pagos fraccionados, that is, advance corporate income tax payments made in installments during the year. Since these advance payments are calculated based on the applicable tax rates, their amount will also decrease. As a result, companies will feel the effect of the tax cut not only when filing the annual return using modelo 200, the main corporate income tax return form, but also throughout the year thanks to lower cash outflows, which is especially important for businesses with limited liquidity.

The preferential 15% regime for start-ups remains in place as a separate support instrument. However, as standard rates for micro-enterprises and small companies decline, choosing the optimal regime becomes a more strategic decision. For some companies, it will be more advantageous to use the 15% rate in the first profitable years, especially with high margins, and then move to the general regime with reduced rates. For others, the new micro-enterprise regime may be more attractive in the long term. Here it is important to consider profit structure, growth forecasts, and the timeline for reaching stable profitability.

Given the transition from old to new rates, companies are well advised to estimate their expected tax base for 2025–2027, verify whether they qualify as a micro-enterprise or an entidad de reducida dimensión, meaning a “small company” in the tax sense, and recalculate future advance payments. This helps avoid cash gaps, plan profit distribution and dividend policy more accurately, and make more informed reinvestment decisions. Under the new conditions, corporate income tax becomes not just an obligation but an element of financial strategy, and companies that adapt to the reform in advance gain an additional competitive advantage.