At the end of last month, Law 22/2021, of 28 December, on the General State Budget for 2022 (Ley de Presupuestos Generales del Estado in Spanish) was published in the Official State Gazette (BOE), which introduces some changes to Personal Income Tax (Impuesto sobre la renta de las Personas Físicas in Spanish) and Corporate Income Tax (Impuesto de Sociedades in Spanish).
In this article we will shed more light on the main tax changes for this year included in the Corporate Income Tax.
The main novelty is the application of a new minimum net tax liability for corporate income tax that will be applicable for tax periods starting on or after 1 January 2022.
Which taxpayers must apply this minimum taxation?
Taxpayers whose net turnover is at least EUR 20 million during the 12 months prior to the beginning of the tax period.
Taxpayers taxed under the tax consolidation regime.
However, entities applying the reduced tax rates of 10%, 1% or 0% and SOCIMIs do not have to apply this minimum taxation.
How is this minimum taxation calculated?
The net tax liability of these taxpayers may not be less than the result of applying 15% to the tax base less or increased by the Equalisation Reserve and the Reserve for Investments in the Canary Islands. This amount will be considered as the minimum net tax liability.
The applicable percentage will be 10% in the case of newly created entities and 18% for credit institutions and for exploration, research and exploitation of hydrocarbon deposits and underground storage facilities.
What tax incentives are affected by this amendment?
The application of this minimum taxation will not affect the Capitalisation Reserves, Equalisation Reserves, and the Reserve for investments in the Canary Islands, nor will it affect allowances or Net operating Losses.
However, it will affect the deductions applicable in the Tax except for those corresponding to double taxation, to the investments made by the port authorities, as well as those established by the Canary Islands Economic Tax Regime.
The amounts that have not been applied due to the application of this new rule may be applied in subsequent tax periods.
Finally, Article 30 of the Corporate Income Tax Law is amended to establish that the net tax payable may under no circumstances be negative.
Other measures included in the 2022 Budget Act
The allowance applicable to entities engaged in the rental of dwellings is reduced from 85% to 40% as from tax periods starting in the year 2022.
At IVC we have a team of experts who are up to date with the complex and ever-changing tax regulations to ensure that your company is always protected and rigorously compliant with its tax obligations.
We coordinate and execute the recurring management of taxes and advise on all your company's tax procedures and queries to optimise tax contributions, always in compliance with current regulations.
Do not lose the opportunity to start the year partnering with us to look after your interests and advise you, not only to meet your tax obligations, but also to obtain the best advantages for your company.