Law 7/2024, of December 20, has introduced a reform of the Corporate Income Tax rates that will benefit small and medium-sized enterprises over the coming years.
The amendment of the tax rates is already applicable from the current tax year 2025 and will be implemented progressively through to tax year 2029.
The reform is being introduced in stages and affects the following categories of entities:
- Microenterprises: Businesses with a net turnover of less than €1,000,000 per year. A two-tier tax rate system applies, with a gradual reduction until 2029:
- For taxable bases up to €50,000, the tax rate decreases progressively from 23% in 2024 to 17% in 2029.
- For taxable bases exceeding €50,000, the rate decreases from 23% in 2024 to 20% in 2029.
- Small-sized Entities (ERD): The tax rate is gradually reduced from 25% in 2024 to 20% in 2029.
- Newly Created Entities (ENC): The reduced tax rate of 15% remains unchanged throughout the period.
The evolution of the tax rates is as follows:
| Type of Entity | Taxable Base | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
| Microenterprises | Up to 50.000 € | 23% | 21% | 19% | 17% | 17% | 17% |
| Over 50.000 € | 23% | 22% | 21% | 20% | 20% | 20% | |
| Small sized Entities ERD | – | 25% | 24% | 23% | 22% | 21% | 20% |
| Newly created Entities ENC | – | 15% | 15% | 15% | 15% | 15% | 15% |
The general Corporate Income Tax rate remains at 25%. This rate also applies to entities classified as holding companies, regardless of their turnover.
This phased implementation must be taken into account when closing the accounts for tax year 2024, in order to adjust tax assets and liabilities to the new applicable rates.
