In this article we will define some of the main tax benefits of the Corporate Tax in 2023, mostly focused on emerging companies. Any citizen should be aware of all these novelties at the time of filing the tax return.
Law 31/2022 of the General State Budget has introduced an important novelty in the Corporate Tax for the year 2023; the general tax rate has been reduced from 25% to 23%. This measure benefits entities that have invoiced less than 1 million euros in the year 2022 and that are not considered as patrimonial entities.
In turn, as we have already mentioned in previous articles, Law 28/2022 on startups presents several tax advantages aimed at emerging or newly created companies:
– The period in which startups can apply the 15% tax rate has been extended. Now, this reduced rate can be applied during the two additional tax years, which means that startups can benefit from the 15% rate in the first tax period in which they obtain a positive taxable income, as well as in the following three tax years.
– Start-up companies have the option of requesting a deferral of the corporate income tax corresponding to the first two tax periods in which they obtain a positive taxable base. This deferral is for 12 months for the first period and 6 months for the second, counted from the end of the deadline for payment in the voluntary period, without the need to pay late payment interest.
– Emerging companies enjoy a tax advantage in relation to remuneration based on the delivery of shares or participations to employees. They can allocate up to 20% of their shares to implement the remuneration formula known as “stock options”. In addition, the exemption limit for remuneration in shares or participations has been increased from 12,000 euros to 50,000 euros per year. It is important to note that the condition of emerging company must have been met at the time the stock options are granted.
– The conditions for the Personal Income Tax (IRPF) deduction for investment have been improved. The deduction rate has been increased from 30% to 50%, and the maximum base for applying this deduction has been increased from 60,000 euros to 100,000 euros. In addition, the period for subscribing the shares or participations has been extended from three to five years, counted from the incorporation of the company, and up to seven years in certain specific categories.
In order to benefit from these tax measures aimed at emerging companies, certain conditions must be met. These conditions include being up to date with tax obligations, filing tax returns within the period established by law, not having been convicted of offenses such as unfair administration, punishable insolvency or corporate offenses, and not having been sentenced to the loss of the possibility of obtaining public subsidies or aid, or of contracting with the Administration.
In the year 2023, the Corporate Income Tax presents other outstanding novelties. Among them is the maintenance of the 15% tax rate for large companies, a measure that was implemented in 2022 with the aim of preventing tax evasion. A special regime has also been established for the Balearic Islands, as well as the possibility of accelerated depreciation for investment in certain new electric vehicles (such as FCVs, FCHVs, BEVs, REEVs or PHEVs) related to business activity. These vehicles will be able to be depreciated at a rate twice as fast compared to the official depreciation tables.
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