Spain Tax Advisory: How is the fractioned payment of the Corporate Income Tax calculated?

The Government has decided to modify the calculation of the fractioned payment in the CIT due to the COVID-19

On April 21st, 2020 the Government launched the Royal Decree-Law 15/2020 on urgent measures to address COVID-19. Among the most important measures is the extraordinary modification of the method of calculating the payment in instalments of the Corporate Income Tax (CIT).

More specifically, it has changed from calculating the percentage on the quota of the tax to calculating the percentage on the base. This new procedure seeks to adapt the applicable calculation of the tax to the economic reality of the moment.

On the other hand, the taxpayer must consider the following criteria when applying the calculation of the CIT:

  • The net turnover for 2019 must not exceed 6,000,000 euros.
  • The option of calculating the advance payment of corporate income tax for the first instalment cannot be exercised.
  • The fixed rate of 18% must be applied in the calculation of the first instalment, in accordance with Article 40.2 of the Corporation Income Tax Law (CITL).
  • This method of calculation is not covered by the special tax consolidation regime.

Finally, the appropriate fulfilment of these requirements will enable the taxpayer to benefit from the modification until October 20th, 2020.

B Law & Tax

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Tags: spain tax advisor, COVID-19, tax advisory Madrid, Corporate Income Tax, Fractioned payments, Calculation mode