The benefits of companies in Spain grew by 10.5% in 2023 and achieved a positive accounting result of 299,967 million euros, the highest in the historical series, which has been collected since 1995. The increase was greater in large companies and groups, 15.4%, and even exceeded this figure in multinationals and in the energy and financial sectors, as detailed by the Tax Agency in its annual report published this Thursday. However, companies have been paying a lower percentage in Corporate Tax (IS) for years than before the financial crisis.
He effective type on the positive accounting result (profit) amounted to 12.37% in 2023, the maximum in recent years, but very far from the 16.17% in 2007 or the 20.49% in 2003, exactly 20 years ago. For this change to occur, among other factors, the approval of tax credits that reduce the tax bases of the tax and reduce potential collection. Also “the distortions that are being generated” by companies that pay taxes at rates of 0% and 1% with very irregular profits (collective investment institutions and pension funds).
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The tax base It is, in this case, the amount of business profits on which the IS is applied. Its evolution has been separated from the benefits, so although these exceeded the figures prior to the financial crisis in 2017, the tax base remained far below. In fact, it was not until 2023 that it exceeded the 2007 value. “In the last three years there has been a progressive approach between the tax base and profits,” describes the Tax Agency. This is consequence of regulatory measures taken in recent years by the Government to increase taxation on companies.
According to the report, tax bases have increased because large companies and multinationals have been able to carry out fewer double tax exemptions after the Treasury tightened the regulation in 2021. In addition, in 2023 another regulatory change regarding the calculation of tax bases of the groups. Now they are calculated by adding the positives and 50% of the tax bases negative of its member entities. This increases the amount recorded by the IS and results in a higher effective rate paid and an increase in tax collection. 1,098 million in 2023.
Beyond the measures that especially affect the tax base, another regulatory change by the Government has achieved greater tax collection. This is the entry into force of the minimum rate of 15% on the tax base for companies with a turnover equal to or greater than 20 million euros, which has added 596 million to the 2023 collection.
However, the measures most publicized by the Government have been others: the temporary liens to the financial and energy sectors. These do not influence the increase in the IS tax bases, although they do influence the total tax collection with 3,528 million in 2023. This is because they have the legal nature of property benefits, not taxes, although the Government’s intention is to incorporate both in this way and make them permanent starting in 2025. The approval of the minimum rate on the 15% of the adjusted accounting resultwhich would increase collection.
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In the line of continuing to increase tax bases and not lose revenue, the Treasury has included an amendment through the socialist group to reestablish the limits on the compensation of negative tax bases and deductions to avoid international double taxation that the constitutional Court declared null and void in its ruling of January 18, 2024. If this amendment goes ahead in the draft law on measures for the crisis in Ukraine, it will lead to an additional increase in the quota to be paid by certain companies.
As a consequence of the measures adopted and the good performance of business profits, corporate tax collection in 2023 has reached the best figure since 2007, 35,060 million, which represents an annual increase of 9%, slightly below the growth in profits. This figure is found 23% above what was budgeted by the Government6,541 million more, which has given it room to approve tax cuts such as VAT on food and the decrease in personal income tax for low incomes.
However, collection has been affected by returns of the result of the annual declaration. Furthermore, the IS continues to have less prominence in total tax revenues than in the years with higher effective rates: it accounted for 12.9% of the total in 2023, compared to 22.3% in 2007.
