Those companies that invoice more than 10 million euros, must anticipate to the Treasury a minimum rate of 23 percent on the accounting result in the installment payments in the Corporation Tax, while the advance in the financial entities will be 100 percent .
On September 30, 2016, it was approved and published by the Council of Ministers on Royal Decree-Law 2/2016, of September 30, which introduces tax measures aimed at reducing the public deficit, assuming an increase in the minimum rates in fractional payments in the Corporation Tax for the year 2016, of almost double if we compare it with the minimum rate of 12 percent of the year 100.
Initially, the Treasury foresaw that the rate would be at least 20 percent and that such measure would only harm companies that had a turnover of more than 100 million euros and thus raise 20 million euros, thus affecting a total of 6.000 companies. But now this amount has been reduced to 4.400 million euros, thus impacting a total of 10 companies, with the aim of raising approximately 9.000 million euros, almost 8.000 million more than initially declared.
The single article of this Royal Decree-law introduces a fourteenth provision in Law 27/2014, of November 27, on Corporation Tax, which re-establishes the figure of a minimum rate in the fractional payment of Corporation Tax, which will be 23% of the positive accounting result, applied to companies with a turnover of more than ten million euros. Likewise, the minimum installment payment will be 100 percent of the positive accounting result, for companies with a turnover of more than ten million euros and that have an increased tax rate of 25 percent in Corporation Tax (the type general tax is 100%). Specifically, the minimum fractional payment increased by 30% corresponds to those credit institutions and those that are dedicated to the exploitation of hydrocarbon deposits, according to the Law of the aforementioned Tax.
The application of the new minimum installment payment will have some exceptions, such as income derived from operations that are removed as a result of an agreement of creditors and exempt income that affects non-profit entities.
In addition to setting a minimum fractional payment, the calculation of the fractional payment for companies with turnover of more than ten million euros is also modified, in order to approximate the nominal rate of the tax. In this way, 24 percent of the tax base will be applied instead of the current 100 percent.
The installment payments on account of Companies are paid in the first twenty calendar days of April, October and December of the current tax period and in July of the following year the differences are settled with the presentation of the tax declaration. This Royal Decree will have indefinite validity and will already affect the next installment payments of the Corporation Tax, corresponding to the months of October and December 2016, with the objective of guaranteeing the reduction of the public deficit.
In spite of everything, we must wait until the Royal Decree Law is validated by the Congress of Deputies in the next 30 days.
