Taxation of the Sociedad Limitada

One reason to create an SL is tax: a company is taxed differently from an individual, and above a certain profit level it usually works out cheaper. These are the taxes an SL pays in Spain.

Corporate Income Tax (Impuesto sobre Sociedades)

The main tax: it is levied on the company’s profit. Rates in force in 2026:

• 25%: standard rate.
• 15%: newly created entities, for the first tax period with a positive base and the following one.
• 19% / 21%: micro-enterprises (turnover below €1 million): 19% on the first €50,000 of taxable base and 21% on the rest (transitional regime under Law 7/2024).
• 23%: small enterprises (€1-10 million turnover), with a scheduled gradual reduction to 20%.

It is filed with form 200 (in July, if the tax year matches the calendar year), with advance payments via form 202 in April, October and December.

VAT (IVA)

The SL charges VAT on its sales (standard rate 21%) and deducts VAT on its purchases. It is settled quarterly with form 303, plus an annual summary (form 390). If the company trades with other EU countries, it will also need ROI registration and recapitulative statements (form 349).

Withholdings

When the SL pays salaries, professional invoices or rent, it must apply IRPF withholdings and pay them to the Tax Agency with form 111 (quarterly) and the annual summary form 190. This is a very common obligation — and one of the biggest sources of penalties when neglected.

Other tax obligations

• Annual accounts: mandatory filing with the Mercantile Registry every year.
• Accounting books: the SL must keep official accounts under the Spanish General Accounting Plan.
• Form 036: census declaration for registration, changes and deregistration.

The nuance almost nobody explains: double taxation

Company profit is first taxed under Corporate Income Tax and, when distributed to shareholders as dividends, taxed again under the shareholder’s personal income tax (IRPF). That is why the SL is most tax-efficient when shareholders do not need to withdraw all the profit and can leave part of it in the company to reinvest. If you are going to take out 100% every year to live on, the tax advantage shrinks considerably.

Informational content updated October 2026. This is not tax advice: each case should be reviewed with a professional.