STORIES

18 October, 2017

How an appropriate tax planning can improve your company’s tax savings

Share This:

Please remember that tax savings always derive from an appropriate planning, that should be designed well in advance.

Spanish Corporate income tax is due on the 25 days following 6 months as from the end of the fiscal year. Throughout the fiscal year, Spanish taxpayers are obliged to advance the final tax during the months of April, October and December.

Such payments are creditable against the final tax. However, the current regulations establish a minimum payment based on the accounting result for companies whose turnover in the preceding 12 moths was of, at least, 10 million Euro.

Knowing how these rules work out as well as going through the appropriate planning of the accounting result in each relevant period can lead to significant tax savings as well as to the effective deferral of the tax payment.

This month, Spanish companies and permanent establishments are obliged to pay on account of the final Corporate income tax no later than on the 20th of October. The following methods of calculation can be applied:

  1. 18% of the tax quote of the last fiscal year whose filing deadline is overdue on the 1st of October. For companies whose fiscal year coincides with the calendar year, the last fiscal year to take into consideration is 2016, as the filing deadline of the 2016 Corporate income tax return was on July 25, 2017.
  2. Based on the taxable result obtained from the fiscal year beginning up to September 30. This system is mandatory for companies whose standalone turnover in the 12 months preceding the beginning of the fiscal year exceeded 6 million €, and it can be elected by the rest of taxpayers. Although the percentage for companies subject to the standard 25% Corporate income tax annual rate is 17%, the following rates apply, depending on the companies standalone turnover in such preceding period:
  • Higher than 6 million € but lower than 10: companies are subject to the standard 17% advanced payment rate.
  • At least 10 million €: 24%, when companies are subject to the standard 25% annual Corporate income tax rate. In addition to being subject to a higher rate, these taxpayers are subject to a minimum payment of 23% of the companies’ accounting result during the period of reference of the advanced payment. This implies not taking into account eventual negative book to tax adjustments or pending tax losses carried forward from previous fiscal years, that will ultimately decrease the final annual Corporate income tax due, despite the fact of having advanced a substantial amount of tax.

It is, therefore, strongly recommendable to accurately plan, in so far as possible, the accrual of earnings which may be deferrable to the month of December and that would not be included in the advanced payment computation despite forming part of the final accounting result. Such would be the case, for example, of dividends exempt from tax at the level of the shareholder company or of exempt capital gains deriving from the sale of qualifying shares.

Please remember that tax savings always derive from an appropriate planning, that should be designed well in advance.

Share This:

CONTACT

MADRID
Pedro Teixeira 8, planta 4ª, 28020
T+34 91 192 21 22

MAP

BARCELONA
General Mitre 28-30 08017.
T+34 93 363 65 10

MAP

Based in Barcelona and Madrid. Englobally is our Latin American business partner established in Santiago de Chile.

We are also part of Englobally Group, an international association of independent accounting and advisory firms that provide a one-stop shop managed solution for accounting, payroll and HR needs, with member firms in over 25 countries and associates working in many others. Many fast growing technology and lifescience businesses find their international services invaluable. Companies in many other sectors are attracted by the close and supportive way Englobally Group works.

Name

E-mail

Message

Please type the code below

captcha

  • Este sitio web utiliza Cookies de terceros y de análisis, para recopilar información con la finalidad de mejorar nuestros servicios, así como para analizar sus hábitos de navegación. Si continúas navegando, supone que aceptas expresamente la instalación de las mismas. Tienes la posibilidad de configurar tu navegador pudiendo, si así lo deseas, impedir que sean instaladas en tu dispositivo, aunque deberás tener en cuenta que dicha acción podrá ocasionar dificultades de navegación de la página web.

  • De conformidad con lo establecido en la normativa vigente en materia de Protección de Datos de Carácter Personal, le informamos que sus datos serán incorporados al sistema de tratamiento titularidad de PROFESSIONAL BOOKKEEPING SERVICES S.L. con CIF B59830638 y domicilio social sito en RONDA DEL GENERAL MITRE 28 08017, BARCELONA, con la finalidad de atender sus consultas. En cumplimiento con la normativa vigente, PROFESSIONAL BOOKKEEPING SERVICES S.L. le informa que sus datos serán conservados durante el plazo estrictamente necesario para cumplir con las acciones mencionadas con anterioridad.

    Salvo comunicación contraria por su parte, entenderemos que sus datos no han sido modificados, que usted se compromete a notificarnos cualquier variación respecto de los mismos, y que usted da su expreso consentimiento para que PROFESSIONAL BOOKKEEPING SERVICES, S.L. utilice los mencionados datos para las finalidades mencionadas.

    PROFESSIONAL BOOKKEEPING SERVICES S.L. le informa que procederá a tratar los datos de manera lícita, leal, transparente, adecuada, pertinente, limitada, exacta y actualizada. Es por ello que PROFESSIONAL BOOKKEEPING SERVICES S.L. se compromete a adoptar todas las medidas razonables para que estos datos se supriman o rectifiquen sin dilación cuando sean inexactos.

    De acuerdo con los derechos que le confiere la normativa vigente en materia de protección de datos podrá ejercer los derechos de acceso, rectificación, limitación de tratamiento, supresión, portabilidad y oposición al tratamiento de sus datos de carácter personal, así como del consentimiento prestado para el tratamiento de los mismos, dirigiendo su petición a la dirección postal indicada más arriba o al correo electrónico info@pbs.es.

    Podrá dirigirse a la Autoridad de Control competente para presentarla reclamación que considere oportuna.

    El envío de estos datos, implica la expresa aceptación de esta cláusula.

  • Pursuant to current Personal Data Protection Regulations, you are hereby informed that your data will be included in a processing system owned by PROFESSIONAL BOOKKEEPING SERVICES S.L. with Tax ID No. B59830638, with its registered address at RONDA DEL GENERAL MITRE 28, 08017 BARCELONA (SPAIN), in order to deal with your questions and requests. In compliance with current regulations, PROFESSIONAL BOOKKEEPING SERVICES S.L. hereby informs you that your data will be kept for as long as is strictly necessary to complete the aforementioned action.

     

    Unless otherwise stated, we will consider that your data have not been modified, that you undertake to inform us of any modifications thereto, and that you give your express consent for PROFESSIONAL BOOKKEEPING SERVICES, S.L. to use said data for the specified purposes.

     

    PROFESSIONAL BOOKKEEPING SERVICES S.L. informs you that it will proceed to process your data in a lawful, loyal, suitable, relevant, limited, exact and updated manner. Therefore, PROFESSIONAL BOOKKEEPING SERVICES S.L. undertakes to apply all reasonable measures to ensure that any incorrect data are deleted or corrected without delay.

     

    According to the rights granted to you under current data protection regulations, you will be entitled to exercise your rights of access, rectification, limitation on processing, suppression, portability or opposition regarding the processing of your personal data and your consent to the same, by addressing a written request to the postal address provided above or to the email address info@pbs.es.

    By sending these data, you are expressly accepting this clause.