Every company or entity should be aware of the importance of to file corporate income tax in the correct time and form. If you are not familiar with this tax, it is very important that you get informed and consult with our tax consultancy service in Tenerife so that you know whether you are obliged to do so.
What is Corporate Income Tax (IS)?
This is the tax that is levied on the profits obtained by your company during the year. As a general rule, for companies whose tax period ends on 31 December, it is filed between 1 and 25 July, so it is very important that you do not miss the deadline if you do not want to run the risk of penalties.
Corporate income tax is filed using form 200 (or 220 for groups of companies).
What to bear in mind when filing corporate income tax?
There are a number of important points to bear in mind when it comes to filing corporate income tax.
1. Not only companies are obliged to submit it
You should bear in mind that it is not only companies that must file the IS. Cooperatives, social entities, public or private associations, foundations, sports clubs, economic interest groupings and state-owned companies are also obliged to file.
There are also entities without their own legal personality that must file the tax, such as temporary joint ventures (UTE), investment funds and pension funds.
2. You need to know your rate of taxation
To calculate the amount you have to pay on your profits you need to know your tax rate.
It is important to know that although the general tax rate is 25%, there are different special cases. Newly created companies only pay 15% during the first year in which they make a profit and the following year. From 1 January 2023, companies and entities with a turnover of less than EUR 1 million pay the reduced rate of 23%. The tax rate for non-profit entities according to Law 49/2002 is 10%. Lastly, mention should be made of entities in the Canary Islands Special Zone (ZEC), which are taxed only at 4%.
3. Act quickly on possible errors in the accounts
When it comes to calculating and filing your corporation tax return, it is necessary to do it correctly. If you are aware that there are errors in your accounts, the correct thing to do is to correct your accounts before filing the tax return.
Errors in the annual accounts, when minor, can be corrected in the following year, although it is important that a tax advisor assesses whether it is necessary to present new corrected annual accounts, provided that they are serious errors that substantially affect the company's assets.
4. Make a supplementary payment in the event of damage to the Treasury.
If you have already filed form 200 and it contains errors to the detriment of the tax authorities, you must file a supplementary tax return detailing the damages that are added or modified to your tax return. You can also make a request for rectification of undue income in the event that it is your company that has been harmed by the error.
5. Seek tax advice if in doubt
Given the complexity that can involve the casuistry of any company, there are usually no magic formulas or templates on the Internet that can solve the calculation and presentation of the annual accounts. It is necessary that a professional with knowledge of Corporate Tax Law, and most importantly, with experience in the preparation and presentation of the tax, can accompany you in the process.
In many cases, it is accounting errors that lead to corporate tax failures, so it is important to have expert tax advisors to help you with the management of the accounts and the preparation of the Annual Accounts to ensure that everything is correct.
From Exim Asesores we invite you to get in touch with us to resolve any doubts or needs.
