3. Corporate Tax

In Corporate Tax revenue grew by 11.5% to 39,096 million ( Table 3.1 ). The figure would rise to around 18% if the income lost due to regulatory changes were added ( Table 1.5 ). Corporate profits (excluding those taxed at rates of 0% and 1%) are estimated to have increased by 13.4% in 2024, marking four consecutive years of high rates, always above 10%. The known information on the profits declared by Large Companies and groups in their fractional payments indicates that these increased by over 12% (almost 15% in Large Companies not belonging to groups and just over 11% in the latter; Table 3.2 ).

A consequence of the increase in profits was an 11.1% increase in installment payments, the main component of the tax. This was compounded by the sharp increase in withholding taxes on capital gains, which grew by 40%, and those linked to capital gains in investment funds, which increased by 70%. Together, the two figures represented an increase of more than 800 million over the previous year, the largest increase recorded in the historical series. On the contrary, the contribution of the annual declaration (for the 2023 financial year) was negative. Almost 1.1 billion were lost compared to 2023. The reasons are varied. On the one hand, the regulatory changes approved in the 2023 Budget, which first impacted the tax return filed in 2024, reduced the amount of taxable income by more than 350 million euros. On the other hand, the ruling against RDL 3/2016 affected the collection from the campaign (both due to lower income and a higher amount of refund requests) and, in addition, forced the return of amounts from previous years. Finally, returns from the 2023 campaign were made faster than in previous years.

The consolidated tax base the Corporate Income Tax grew by 10.8%, thus linking four years of notable increases (11.4 in 2023, 17.7% in 2022 and 36% in 2021), in line with the evolution of profits excluding companies with zero or one rates ( and Chart 3.1). Over the past four years, the tax base has gradually narrowed to these benefits, primarily due to smaller adjustments associated with the double taxation exemption, the regulations of which were amended in fiscal year 2021. Following the new increase in the tax base, another historic high has been reached, surpassing the amount for 2023, the year in which the previous peak reached in 2006 was exceeded for the first time. The same cannot be said of the accrued tax, which remains lower than that observed at that time (Chart 1.23). The detailed evolution of the tax since 1995 can be analyzed with Table 8.5 .

Chart 3.1. Annual variation rates of the taxable base in Corporate Income Tax and corporate profits

The effective rate on the tax base decreased slightly in 2024 (-0.4%) after falling by 1.5% in 2023 (Chart 3.5). The rate on profits is also expected to decrease, by 2.7%. The latter is calculated on the profits of companies excluding those that pay taxes at rates of 0% and 1%. The reason for this exclusion is the irregular performance of the profits of these companies, almost all of them financial (pension funds, investment companies, etc.), which are linked to the valuation of their assets, which, in turn, depends on changes in interest rates and the reactions of financial markets. This fact has a significant impact on the variation in profits (Chart 3.2), but it barely affects the tax given its low or non-existent taxation.

Chart 3.2. Amount of profits of companies that pay taxes at rates of zero and one percent and their weight in total company profits

The Corporate Income Tax accrued increased by 10.4% in 2024 (13.2% without differential rate), thanks to the 11% increase in fractional payments and the positive evolution of capital income. Payments grew by 9.9% in consolidated groups and by 13.7% in large companies, in both cases with a higher contribution from the minimum payment due to improved profits (Chart 3.3). In fact, the minimum wage increased by over 21% for groups and by almost 60% for large companies. For its part, among SMEs a rate of 9.5% was reached, mainly thanks to the good performance of those that paid taxes according to their last annual quota (11.2%), while payments by companies that declared according to the profits of the year grew by 4.7%.

$Chart 3.3. Contribution of the minimum payment on the fractional payment to the total amount of the same, according to the type of companies belonging to groups or non-groups$

Chart 3.4 illustrates the relationship between payments and differential quota until the total accrued tax is completed. Years in which the weight of minimum installment payment income increases also tend to lead to a high number of refund requests and a negative differential rate. Therefore, the increase in the weight of the minimum payment in 2024 is expected to imply a higher amount of refund requests when the annual declaration corresponding to the year is submitted and, consequently, an increase in the amount of the negative differential quota ( Table 3.3 ).

$Chart 3.4. Percentage of the total tax accrued in Corporate Income Tax from income from fractional payments and withholdings and income from differential quota$

Chart 3.5. Corporate Tax Chart Series (198 KB - pdf )

## Cash income grew by 11.5% ( Table 3.1 ), driven by the good results of installment payments, capital withholdings and withholdings on investment funds. Withholding taxes on leases also increased, albeit at a slower rate than in previous years.

The net result of the annual declaration associated with the settlement of the 2023 fiscal year subtracted income from the collection, both due to the low growth in gross income and the increase in returns ( Table 3.3 ). As already mentioned, this result was due to several factors: the regulatory changes approved in the 2023 Budget, the ruling against RDL 3/2016 and the advancement in the schedule for making returns for the 2023 campaign (returns filed from the end of July 2024 onwards, which increased by 18.6%).
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