Spain’s corporate tax in 2025

Spain corporate tax 2025 has positioned the country as one of Europe’s top spots for business growth and international investment.

With its prime location, modern infrastructure, and attractive tax incentives, it’s no surprise that more companies are eyeing Spain for expansion.

In 2025, Spanish tax reforms brought big changes to the corporate tax system, opening new doors for foreign companies, startups, and SMEs. 

From updated rules on SME taxation in Spain to new advantages under the Spanish startup law and ETVE holding structures, the landscape is shifting in favour of innovation and growth.

Whether you’re a small business looking into tax for SMEs in Spain, a new venture exploring the startup tax in Spain, or an established brand planning Spain business expansion, the current system of corporate tax incentives in Spain makes the country a stronger choice than ever.

Key highlights of Spain corporate tax 2025 reforms include:

• Progressive SME taxation in Spain: rates reduced from 25% to 21% by 2028
  
• Enhanced capitalisation reserves: up to 30% tax base reductions
  
• New micro-enterprise rates: starting as low as 17% by 2027
  
• Stronger ETVE holding Spain benefits: 95% tax exemptions
  
• Comunidad Valenciana wealth tax threshold doubled to €1 million

To make the most of Spain’s corporate tax changes, it’s important to understand the wider tax system, and getting help from professional tax and accounting experts is key for a smooth business expansion.

Spain corporate tax 2025

Spain’s tax system has gone through big changes in 2025. 

These reforms aim to make the country more attractive for foreign companies in Spain.

Below, we’ll break down the key points in plain language so you can understand how Spain corporate tax 2025 works.

The standard corporate tax rate in Spain

The base rate of corporate tax in Spain is 25%. This applies to most resident companies and puts Spain in line with many other EU countries.

But thanks to the Spanish tax reforms 2025, there are now more tailored rules and incentives for different types of businesses.

Resident vs non-resident companies

Resident companies

• Pay corporate income tax (Impuesto sobre Sociedades) on worldwide income.
  

Non-resident companies

• Only taxed on income earned in Spain.
  
• Can be taxed through:
  
  • Permanent establishment (like a branch)
    
  • Non-resident income tax if they don’t have a permanent setup
    

The main changes in Spain corporate tax 2025

Minimum tax for multinationals (EU Pillar Two)

• Spain now applies a Top-Up Tax as per EU regulations.
  
• Ensures a minimum 15% tax rate for global groups with revenue above €750 million.
  
• Affects large corporations, not small businesses, but shows Spain is aligned with international tax rules.
  

New sector-specific taxes

Spain has also added some special taxes in 2025:

• Banks and financial institutions: taxed on interest and commissions (not deductible).
  
• Electronic cigarettes: new tax on e-liquids to regulate an emerging industry.
  

Foreign company Spain: Branch vs subsidiary

If you’re planning a Spain business expansion, you need to decide between setting up a branch (permanent establishment) or a subsidiary.

Branch (Permanent Establishment)

• Pays the same corporate tax rate as Spanish companies.
  
• Some deductions are restricted.
  
• Limited access to double taxation treaties.
  

Subsidiary

• Full access to Spanish tax incentives, including corporate tax incentives Spain and Spanish startup law benefits.
  
• Covered by Spain’s treaties with other countries (helps avoid double taxation).
  
• Must follow Spanish corporate law and reporting requirements.
  
• More flexibility for SME taxation Spain and long-term planning.
  

Spain corporate tax 2025: SME & startup incentives

What’s new for SMEs and startups

• Lower SME rates (turnover < €10M) phased from 24% in 2025 down to 21% from 2028.
  
• Micro-enterprises (turnover < €1M) get tiered bands with a lower rate on the first €50k.
  
• Enhanced capitalisation reserve: bigger base reductions tied to equity growth, with extra bonuses for workforce growth.
  

SME tax rate timeline

Micro-enterprise rates 

• Lower rate on the first €50,000, slightly higher on the excess.
  
• Effective rate on €100k drops to ~18.5% by 2027 and beyond.
  

Capitalisation reserve (2025+)

Foreign company expansion: Tax optimisation with ETVE

The ETVE (Entidad de Tenencia de Valores Extranjeros) regime is one of Spain’s strongest tax tools for foreign companies looking to expand.

 It is especially useful for cross-border M&A and international investment.

Key benefits

• 95% exemption on dividends and capital gains from foreign subsidiaries
  
• Effective tax rate of just 1.25% on qualifying income
  
• Simple requirements: minimum 5% shareholding for 1 year
  

Strategic advantages

• Access to Spain’s treaty network: over 100 double taxation treaties worldwide
  
• Reduced withholding taxes on dividends, interest, and royalties
  
• Full compliance with EU directives for intra-EU transactions
  

Operational advantages

• Low minimum capital requirements
  
• Straightforward compliance and reporting
  
• Full alignment with Spanish corporate law

Beckham Law: Benefits for expats

The Beckham Law offers big tax advantages for foreigners moving to Spain, especially professionals and international talent.

Tax benefits

• Flat 24% tax rate on Spanish income (for up to 6 years)
  
• No tax on foreign income earned outside Spain
  
• Avoids Spain’s high progressive rates (up to 47%)
  

Who can qualify?

• Must not have been a Spanish tax resident in the last 5 years
  
• Must become a resident through an employment contract or a director role
  

Most income must come from employment, not investments

Regional tax advantages in the Comunidad Valenciana

The Comunidad Valenciana is becoming a hotspot for international business. Its tax policies and location make it a strong choice for expansion.

The biggest change in 2025 is the doubling of the wealth tax exemption threshold. 

It rises from €500,000 to €1,000,000, effective 31 December 2025. 

Beyond taxes, the region offers clear geographic advantages.

 Valencia and Alicante host world-class ports, making trade fast and efficient.

From here, companies can serve both European and North African markets with ease.

Valencia also invests heavily in its business ecosystem. It has strong digital infrastructure, tech parks, research centres, and universities that collaborate with industry. 

The administration supports foreign investors with simpler procedures and sector-specific incentives in technology, renewable energy, and manufacturing.

Partner with Daleguía y Luzón

Expanding into Spain brings exciting opportunities, but also complex tax challenges. 

From structuring your entry to managing compliance and optimising for long-term savings, having the right guidance makes all the difference.

At Daleguía y Luzón, we specialise in helping foreign companies, startups, and investors navigate Spain’s corporate tax system with clarity and confidence. 

Our services cover every stage of your journey:

• Strategic tax planning tailored to your business goals
  
• Full compliance management for filings and reporting
  
• Cross-border coordination to align with global tax strategies
  
• Ongoing advisory support as regulations evolve
  

Ready to explore your opportunities under Spain corporate tax 2025 and beyond?

Contact Daleguía y Luzón today for a confidential consultation. 

Our team will analyse your situation, identify potential tax savings, and design a clear roadmap for your Spanish business expansion.