Spain’s 15% Corporate Tax RateWhen a New Spanish Company Is Truly “New” for Tax Purposes
- Business Expats
- 2 days ago
- 11 min read
Just incorporated a Spanish company — or planning to?
A new SL is not automatically a "new company" for the 15% Corporate Income Tax rate. Confirm your eligibility before you build your business plan around it.
Spain offers a reduced 15% Corporate Income Tax rate to certain newly created companies. For international founders relocating to Spain, this can represent a meaningful advantage during the first profitable stage of the business.
The rule, however, is frequently misunderstood. Incorporating a new Spanish limited company does not automatically mean that the company qualifies as a newly created entity for tax purposes. The date appearing on the incorporation deed is only the starting point. The Spanish tax analysis focuses on whether the company is carrying out a genuinely new economic activity or merely continuing a business that was previously operated by the founder, a foreign company or another related party.
For an expat founder, this distinction is particularly important. A new Spanish SL may look completely new from a corporate-law perspective while being regarded as a continuation of an existing activity for Corporate Income Tax purposes.
The legal basis for the 15% rate
In practical terms, eligibility depends on the economic history of the business, not simply on the date shown in the company’s incorporation deed. The following overview summarizes the principal conditions that an international founder should review before applying the reduced rate.
Key question | Spanish tax requirement | Practical outcome |
Has a new Spanish company been incorporated? | Incorporation is necessary, but it does not by itself establish eligibility. | A newly registered SL is not automatically a “new company” for tax purposes. |
Does the company carry out a genuine economic activity? | The entity must organize resources to provide goods or services through a real business operation. | Passive or merely formal structures will not qualify. |
When does the 15% rate begin? | It applies in the first tax period with a positive taxable base and in the immediately following tax period. | It does not necessarily apply during the first two years after incorporation. |
Was the activity previously carried out by a related person or company and transferred to the Spanish entity? | The activity must not be the continuation of a business transferred by a related party. | Moving an existing foreign business into a new Spanish SL may prevent access to the rate. |
Did the founder perform the same activity personally during the previous year? | The activity is not considered new where the founder previously carried it out and later owns more than 50% of the new entity. | Consultants, freelancers and digital founders require particular review. |
Does the company belong to an existing corporate group? | Entities forming part of a group under Article 42 of the Spanish Commercial Code are excluded. | A newly incorporated Spanish subsidiary of a foreign group will generally not qualify. |
Is the company considered an asset-holding entity? | Entities classified as patrimonial under Article 5.2 LIS cannot apply the 15% rate. | A company mainly holding investments, cash or non-operating assets may be excluded. |
What amount is taxed at 15%? | The rate applies to the taxable base after the relevant accounting and tax adjustments. | It is not 15% of revenue, invoices issued or cash received. |
The table provides a useful initial filter, but the conclusion ultimately depends on the facts. For an expat founder, the review should cover not only the Spanish company but also any activity previously performed personally or through foreign entities, the ownership structure, the origin of the client relationships and the assets or contracts transferred to Spain. The reduced rate begins when the company first becomes taxable.
The relevant provision is not found in the Spanish Companies Act. It is contained in Article 29.1 of Law 27/2014, of 27 November, on Corporate Income Tax, commonly referred to as the Spanish Corporate Income Tax Law or Ley del Impuesto sobre Sociedades.
Article 29.1 establishes that newly created entities carrying out economic activities may apply the 15% rate in the first tax period in which their taxable base becomes positive and in the immediately following tax period. The same provision also sets out the circumstances in which an activity will not be regarded as newly commenced and the entities that are excluded from the incentive.
This means that the 15% rate is not simply awarded because a company has recently been registered. It must be supported by the nature, origin and operational reality of the business.
The reduced rate begins when the company first becomes taxable
The 15% rate does not necessarily apply during the first two calendar years following incorporation. It applies during the first tax period in which the company generates a positive taxable base and during the tax period immediately following it.
A company incorporated in 2026 could report tax losses in 2026 and 2027 while developing its business. If it produces its first positive taxable base in 2028, the 15% rate could potentially apply in 2028 and 2029, provided all other legal requirements are satisfied.
The second qualifying period is the immediately following tax period. The legislation does not refer to the next profitable period. Therefore, if the company records a tax loss during that following year, the reduced-rate period is not automatically postponed to a later profitable year.
This timing should be monitored carefully because accounting adjustments, depreciation, provisions, deductible expenses and the use of prior-year tax losses may affect when the company first reports a positive taxable base.
The 15% rate applies to taxable income, not turnover
The reduced rate is applied to the company’s taxable base. It is not applied directly to revenue, invoices issued or cash collected.
The taxable base generally starts with the company’s accounting result and is then adjusted in accordance with the Corporate Income Tax Law. Certain expenses may not be deductible, accounting and tax depreciation may differ, related-party transactions may require adjustments and available tax losses may affect the final amount subject to tax.
A company that invoices €300,000 does not pay 15% of €300,000. If its taxable base after the relevant adjustments is €80,000, the initial corporate tax calculation would generally be based on that €80,000 figure.
For an international founder, this distinction is essential. The actual benefit of the 15% rate depends not only on the company’s sales but also on how the business is financed, how the founder is remunerated, which expenses are deductible and how transactions with foreign entities are structured.
The company must carry out a genuine economic activity
Article 5.1 of the Corporate Income Tax Law defines an economic activity as the organization, on the entity’s own account, of production resources, human resources or both, with the purpose of participating in the production or distribution of goods or services.
In practical terms, the Spanish company should operate as a real business. It should perform identifiable functions, assume commercial risks, use the resources required to provide its services or products and maintain documentation consistent with its stated activity.
The analysis is not limited to whether the company has employees. Depending on the business model, an economic activity may exist through the organization of production resources, human resources or both. What matters is whether the entity is genuinely carrying out the activity attributed to it.
Special care is required for property-rental companies. Article 5.1 provides that the leasing of real estate will generally constitute an economic activity only where at least one person is employed under a full-time employment contract to manage the activity.
A recently incorporated company may still be excluded
Article 29.1 expressly prevents the 15% rate from applying where the supposedly new company is effectively continuing an existing activity.
The first exclusion applies when the economic activity was previously carried out by another person or related entity and was transferred to the newly created company under any legal title.
The wording is deliberately broad. It can cover more than the formal sale of a business. Depending on the circumstances, the transfer of client contracts, personnel, intellectual property, operating systems, assets, commercial relationships or other essential elements may indicate that an existing business has been moved into the new company.
For expat founders, this means that moving an established activity from a US LLC, UK limited company, foreign corporation or another related business into a newly incorporated Spanish SL may prevent the Spanish company from qualifying.
Changing the legal entity or the country of incorporation does not necessarily create a new economic activity.
Previous activity carried out personally by the founder
The second exclusion is especially relevant to consultants, freelancers, digital professionals, software developers and online entrepreneurs.
The activity will not be regarded as newly commenced where it was carried out during the year preceding the company’s incorporation by an individual who subsequently owns, directly or indirectly, more than 50% of the capital or equity of the new company.
Consider an international consultant who provided services personally before moving to Spain. After relocating, the consultant incorporates a Spanish SL, owns 100% of the shares and continues serving substantially the same clients under similar contracts.
Although the Spanish company is legally new, the underlying economic activity may not be. The new entity could be regarded as continuing the founder’s previous personal activity.
The analysis should consider the services provided, the timing, the client portfolio, the contracts, the assets used, the ownership of the company and whether the Spanish entity has developed a sufficiently distinct business operation.
Related foreign entities must be included in the review
Article 29.1 refers to activities previously carried out by persons or entities related within the meaning of Article 18 of the Corporate Income Tax Law.
Article 18 contains a broad definition of related parties. It includes relationships between a company and its shareholders, entities belonging to the same group and companies commonly controlled or owned by the same persons in the percentages specified by the legislation. In shareholder-company relationships, the relevant participation threshold is generally 25%.
This is why a cross-border review is essential.
An expat may own a Spanish SL together with a US LLC, UK company, Dutch BV or another foreign entity. Even where one company does not formally own the other, common ownership and control may create a related-party relationship.
The tax analysis should determine which entity originally carried out the business, which entity owns the contracts and intellectual property, where the personnel are located, which company assumes the risks and whether valuable parts of an existing operation were transferred to Spain.
The fact that the foreign company and the Spanish SL have different names, bank accounts and registration numbers is not conclusive.
Companies belonging to an existing group do not qualify
Article 29.1 also provides that entities forming part of a group within the meaning of Article 42 of the Spanish Commercial Code are not treated as newly created entities for this purpose.
The exclusion applies irrespective of the residence of the other group companies and irrespective of whether consolidated financial statements are actually prepared.
A foreign group that incorporates a Spanish subsidiary to begin operating in Spain should therefore not assume that the subsidiary can apply the 15% rate.
The subsidiary may be newly registered in Spain, but it will generally be excluded where it forms part of an existing controlled corporate group.
This distinction is particularly relevant when an international founder already owns an operating company abroad and creates a Spanish entity under a parent-subsidiary structure.
Passive companies are excluded
The 15% rate is not available to entities classified as patrimonial under Article 5.2 of the Corporate Income Tax Law. An entity is generally regarded as patrimonial where more than half of its assets consist of securities or assets not connected with an economic activity. The classification is determined under specific statutory rules and ordinarily requires an analysis of the company’s balance sheets throughout the financial year.
A recently incorporated company that mainly holds investments, securities, surplus cash or non-operating assets may therefore be excluded even though it has never existed before.
This is another reason why incorporation alone is not sufficient. The company must not only be new. It must also conduct a genuine operating activity and avoid classification as a passive asset-holding entity.
A new company is not the same as a certified start-up
The 15% regime for newly created entities under Article 29.1 should not be confused with the separate tax regime for emerging companies under Spain’s Start-up Law. A company does not need to obtain start-up certification merely to be considered a newly created entity under the Corporate Income Tax Law.
The two regimes have different legal bases and different eligibility conditions. The ordinary new-entity rule focuses on the commencement of a genuine economic activity and the statutory exclusions contained in Article 29.1. The emerging-company regime requires a separate assessment under the Start-up Law and may involve formal certification.
International founders should therefore avoid using the expressions “new company” and “start-up” as though they referred to the same tax status.
The strongest cases are built before the first tax return
The company will normally claim the reduced rate through its Corporate Income Tax return. However, eligibility should be analysed before the first positive return is submitted.
By that time, the company should be able to demonstrate the origin of its activity, the functions it performs and the reasons why the business is genuinely new.
Relevant evidence may include the business plan, incorporation documents, new client contracts, investment records, employment agreements, intellectual-property documentation, operational procedures and agreements with foreign related entities.
For expat founders, the review should also cover the business activities performed personally or through foreign companies during the year preceding the Spanish company’s incorporation.
The strongest tax position is not based on describing the company as new in Form 200. It is based on a consistent factual record showing that the Spanish entity has created and developed a new economic activity.
The strategic value goes beyond the 15% rate
The reduced rate can create a significant tax advantage, but it should be considered as part of the founder’s wider Spanish and international structure.
Even where the company qualifies, additional questions remain. The founder’s remuneration must be structured correctly. Transactions with foreign related companies must be priced and documented appropriately. Intellectual property, contracts and commercial risks must be allocated consistently. The Spanish entity should also have the resources and operational substance required to support the income attributed to it.
Where the 15% rate is unavailable, the review may still identify other opportunities involving the applicable small-company rate, capitalization reserve, tax-loss utilization, remuneration policy or cross-border operating model.
The real objective is not merely to secure a lower percentage. It is to establish a Spanish structure that is efficient, coherent and defensible as the business grows.
Every founder's history — personal, corporate and cross-border — is different, and the 15% rate depends on all of it. Speak with our specialists before your first Corporate Income Tax return is filed.
Business Expats New Company and Cross-Border Tax Review
At Business Expats, we help international founders determine whether their Spanish company genuinely qualifies for the 15% Corporate Income Tax rate. We review the founder’s previous personal activity, foreign companies, ownership and control structure, related-party relationships, client and contract transfers, intellectual property, operational substance and the timing of the company’s first positive taxable base.
Our analysis goes beyond the incorporation date.
We assess whether the Spanish company is legally new, economically new and sufficiently documented to support the reduced rate before the position is reported to the Spanish Tax Agency.
Before applying the 15% rate in your Spanish Corporate Income Tax return, speak with Business Expats.
A focused pre-filing review can confirm eligibility, identify hidden exclusions and ensure that your Spanish company and foreign business interests are structured consistently.
Contact Business Expats to arrange a New Company and Cross-Border Tax Review.
This publication provides general information and does not constitute individualized tax or legal advice.
Business Expats
Madrid +34 692 26 6502 julio.sanchez@businessexpats.com
Andalusia +34 646 16 0662 paul.desousa@businessexpats.com
Lusophone Markets +34 643 98 87 10 juliana.pesqueira@businessexpats.com
FAQ
Does every new Spanish company qualify for the 15% Corporate Income Tax rate?
No. Incorporation is necessary but not sufficient. The company must also carry out a genuinely new economic activity — one that is not a continuation of a business previously run by the founder, a foreign company, or another related party.
When does the 15% rate actually start applying?
It applies in the first tax period in which the company reports a positive taxable base, and in the immediately following tax period — not necessarily in the company's first two years of existence.
Is the 15% rate applied to revenue or to taxable income?
To taxable income (the taxable base after accounting and tax adjustments), not to turnover, invoices issued, or cash collected.
Can a freelancer or consultant who incorporates in Spain lose eligibility for the 15% rate?
Yes, if the individual carried out the same activity personally in the year before incorporation and later owns more than 50% of the new company, the activity may not be treated as newly commenced.
Can a Spanish subsidiary of a foreign group apply the 15% rate?
Generally no. Entities that form part of a corporate group under Article 42 of the Spanish Commercial Code are excluded, regardless of where the other group companies are based.
What is the legal basis for the 15% rate?
Article 29.1 of Law 27/2014, of 27 November, on Corporate Income Tax (Ley del Impuesto sobre Sociedades).
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