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Practical Handbook for Companies 2021

Quantification of the tax debt

Regulation: Article 19 TRLIRNR

For tax periods starting within 2021, the tax rate applicable to the tax base shall be 25 per cent, except for hydrocarbon research and exploitation activities which shall be 30 per cent.

Permanent establishments can apply the deductions and allowances provided for in the Corporate Income Tax Act to the gross tax payable.To the extent that in the course of their activities they have been subject to withholdings, they can apply them to the tax liability resulting from the previous operation, as well as the payments on account and instalments that have been made.

When permanent establishments of non-resident entities that are not individuals transfer income abroad, a supplementary tax of 19 per cent will additionally be payable on the amounts transferred out of the income of the permanent establishment, including the payments referred to in Article 18.1.a) of the TRLIRNR, which have not been deductible expenses for the purposes of determining the taxable income of the permanent establishment.However, this tax will not be applicable to income obtained in Spanish territory through permanent establishments of entities with their tax residence in another European Union State, except in the case of a country or territory considered to be a non-cooperative jurisdiction, or to income obtained in Spanish territory through permanent establishments by entities with their tax residence in a State that has signed a double taxation avoidance agreement with Spain, which does not expressly provide otherwise, provided that in the latter case there is reciprocal treatment.