Corporate tax rates in Spain are set to drop five points

A general reduction in Spanish corporate tax rates has been approved which involves a drop from 30% to 28% as from 1 January, with it set to drop still further to 25% over the course of the year. Another novelty is the so-called ‘compounding reserve’, which spares companies from paying tax on up to 10% of taxable items, provided that percentage is put aside in an unaccessible reserve. This encourages company capitalization in the form of an increase in their own funds, as well as keeping companies more financially healthy and boosting competitiveness.

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