The Tax Agency will reduce, as of 1 January 2027, the tax rates that SMEs and micro-enterprises must pay on their profits. The Corporate Income Tax cut will continue the schedule approved by the Government, with new rates for the smallest businesses, which will depend on their turnover.
Micro-enterprises with a turnover of less than one million euros will apply a rate of 17% to the first 50,000 euros of taxable base and 20% to the remainder. Companies that meet the requirements to be taxed as small entities, meanwhile, will see their rate drop from 23% to 22%.
However, the new percentages will not apply to all returns filed in 2027. Companies whose financial year coincides with the calendar year will settle the tax corresponding to 2026 at that time, while the new rates will be reflected in the return on profits earned in 2027, which will be filed in 2028.
From January, new rates of between 17% and 22% come into force for SMEs and micro-enterprises
In January, the tax cut will continue to reduce the Corporate Income Tax of smaller companies. In 2027, micro-enterprises with a net turnover of less than one million euros will be taxed at 17% on the first 50,000 euros of taxable base and at 20% on the remaining amount.
In the case of small SMEs, the rate will fall to 22%. As a general rule, this regime applies to companies whose net turnover for the previous tax period is below ten million euros, provided they meet the requirements established in the regulations.
The difference between the two categories is significant. Micro-enterprises apply a scale with two taxable base brackets, while small entities apply the rate corresponding to them under their tax regime.
In addition, the 50,000-euro threshold does not refer to the company's sales, but to its taxable base. Therefore, the calculation is not made on total turnover, but on the profit subject to taxation after the corresponding tax adjustments.
The April, October and December instalment payments have their own rules
Companies must distinguish between the annual Corporate Income Tax rate and the percentages used to calculate instalment payments. These advance payments are, as a general rule, filed during the first twenty calendar days of April, October and December.
The regulations establish two main methods for calculating them. Under the general method, 18% is applied to the reference tax liability of the last tax period whose filing deadline has expired at the start of the payment period, with the corresponding adjustments.
The second method calculates the advance payment on the taxable base accumulated during the first three, nine or eleven months of the financial year. Its use is mandatory for companies whose net turnover exceeds six million euros, and it may be an option for other companies that meet the legal requirements.
Under this second method, the percentage depends on the applicable tax rate and the company's volume of business. For companies with a turnover of less than 10 million euros, it is calculated, as a general rule, by applying five sevenths of the tax rate and rounding the result down. For companies that reach or exceed that threshold, the nineteen-twentieths rule applies, as a general rule, rounding up.
For this reason, not all companies will apply the same percentage to their 2027 instalment payments. The reduction in the annual rate may affect advance payments calculated on the taxable base of the year, but it does not mean that all SMEs must directly apply 17%, 20% or 22% to their advance payments.
The return SMEs file in 2027 will still apply this year's rates
Companies whose financial year coincides with the calendar year will file in 2027 the return corresponding to profits earned in 2026. In that settlement, micro-enterprises will be taxed at 19% on the first 50,000 euros of taxable base and at 21% on the remainder. Small entities will apply a rate of 23%, provided they meet the conditions to be eligible for that regime.
The new percentages will be used in the return for the 2027 financial year, which will be filed in 2028. Thus, although the tax cut comes into force on 1 January, its application in the annual settlement will not be reflected in the return filed during that same year.
Corporate Income Tax cuts will continue until 2029
The reduction in rates is part of a progressive schedule approved by Ley 7/2024. The aim is to gradually reduce the tax burden on smaller companies over several financial years.
In the case of micro-enterprises, rates already fell in 2025 to 21% for the first 50,000 euros of taxable base and 22% for the remainder. In 2026, the scale moved to 19% and 21%, respectively. In 2027 it will drop to 17% and 20%, percentages that will remain in place in 2028 in accordance with the approved schedule.
Small SMEs will also follow a downward path. Their rate was 24% in 2025 and 23% in 2026. In 2027 it will fall to 22%, in 2028 to 21% and in 2029 to 20%.
The general Corporate Income Tax rate remains at 25%. In addition, certain companies, such as newly created entities that meet the legal requirements, may be eligible for specific rates.
The application of these tax cuts will depend on turnover, each company's tax regime and the conditions set out in the law. Therefore, before calculating the savings, each company must check which category it falls into and which rate it should apply to the financial year it is settling.