The moment that businessmen fear has arrived. In the month of July, most companies present the Corporate Tax (IS), the tax obligation that all types of companies have in Spain. And although a high tax means a good year during the previous year, we all fear the payment. Today we will give you the keys to the information that the Corporate Tax has for future entrepreneurs and advisors who want to approach understanding this tax for the first time.
The IS taxes about the company's profit, that is, the expenses are subtracted from the net income of the company and a tax rate is applied to the result, which, in general, is a 25% and a 20% for cooperative societies and for newly created companies, a 15%.
Expenses that are deductible from Corporate Tax
In general, the expenses that can be deducted in the presentation of your fiscal year are those that are:
- Accounted: Although there are some (very few) exceptions, the expense must be perfectly accounted for.
- Justified: Present invoice of the expense.
- Defendants: It must have been carried out in the period of the fiscal year in which the balance sheet is made, in this case, the year 2019.
- Correlated with income: The expense must aim to increase the company's profits and, therefore, must have a relationship with the profit obtained.
Other expenses are not deductible, such as the remuneration of the funds of the same company, the expenses derived from the IS itself, fines, sanctions and expenses of actions contrary to the law, donations or losses in gambling, among others. others.
How much corporate tax is collected
Corporate Tax also serves as a thermometer to measure the health of Spanish companies. Thus, in times of economic prosperity, this tax has a high collection, while in times like the 2008 crisis, the opposite happened.
Around 25,000 million euros, that is, from 10 to 15% of the total collection. This is what, every year, Spanish companies contribute to the public treasury. At least, this has been the case until 2019, however, the collection from companies is the one that has been most affected by the pandemic. We will not be able to give a general assessment of the impact of the pandemic until the end of the year, but we can already see that the drop is truly notable.
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