World Tax Atlas

Spain: from company profit to money in your pocket

If you own the company you work through, two taxes hit the same money in turn. The company pays corporate tax on its profit. Then you pay income tax on the dividend you take out of what is left. In Spain the second tax gives you no credit for the first one, so the two stack. That is what the numbers below are showing you, and it is why a calculator that works out only one of them is telling you half the story.

Company profit €200,000, taken out in full

€119,700 in your pocket

  • You keep €119,700
  • Corporate tax €46,000
  • Dividend tax €34,300

Typical case: turnover €1,000,000–€10,000,000.

€200,000 of profit, by company profile

Your company Corporate tax Dividend tax You keep Total rate
New company (first 2 profitable years) €30,000 €37,980 €132,020 34.0%
Turnover under €1,000,000 €41,000 €35,450 €123,550 38.2%
Turnover €1,000,000–€10,000,000 €46,000 €34,300 €119,700 40.2%

Best to worst case: €12,320 on the same €200,000, decided by how long the company has been profitable and how much it turns over, not by anything you do differently in the year.

Where the money goes, step by step

Taking the typical case, turnover €1,000,000–€10,000,000:

Company profit €200,000
Corporate income tax -€46,000 Empresas de reducida dimensión (art. 101 LIS)
Tax on dividends -€34,300 Taxed on its own scale; 19% withheld at payout counts against it
In your hands €119,700 Total tax rate 40.2%

Salary or dividends? The honest answer is “some of each”

There are two ways to get money out of your own company, and they are taxed on opposite logic.

A salary is a cost to the company. It comes off the profit before corporate tax, so every euro of salary is a euro the company never pays corporate tax on. Then it hits you on the general IRPF scale (progressive, and part of it set by the autonomous community you live in), and it drags social security contributions along with it.

A dividend does the reverse. It is paid out of profit that has already been taxed, so it buys the company nothing. In return it sits on the savings scale, which runs from 19% up to 30%, and carries no contributions. The company withholds 19% when it pays you. That is a payment on account, not the final tax. If the dividend reaches the upper bands, the rest falls due with your annual return. People forget this and get an unpleasant surprise the following June.

We will not hand you an “optimal salary” figure. The honest answer depends on four things we cannot see from here:

  • What the deduction is actually worth. A company taxed at 15% gets back far less per euro of salary than one taxed at 25%. The cheaper your corporate rate, the weaker the case for salary.
  • Your marginal general-scale rate, which is not the same in Madrid as in Catalonia.
  • Whether you want the contribution record. Contributions are a cost, but they buy pension, sick pay and unemployment cover. Dividends buy none of that.
  • Whether you need documented salary income: for a mortgage, or a residence permit that asks for it.

Spain does not net the two taxes off against each other

Some countries let you subtract the corporate tax the company already paid from the tax on your dividend. Spain does not. The corporate tax is gone, and the dividend is then taxed as if it were fresh income.

That is why the combined bite lands somewhere around 34% to 40% of the profit, depending on which corporate rate your company falls under. It is deliberate, and no amount of structuring inside the company changes it.

The “nueva creación” trap

The 15% rate applies in the first tax period with a positive tax base and the one after it. Not the first two calendar years. Founders mix this up constantly. Burn cash for three years and the cheap rate is still waiting for you in years four and five. That is good news, and the opposite of what most people assume.

It also has trapdoors: no patrimonial entities, no companies inside a group, and nothing where the same activity was previously carried on by a person who now holds more than half of the new company. That last one is aimed straight at freelancers who incorporate the business they already run.

What the number above is not telling you

  • Reserva de capitalización and reserva de nivelación cut the corporate tax base before the rate is applied. We do not model them. If you use them, your real corporate tax bill is lower than the table shows.
  • Other savings income. The table assumes the dividend is the only savings income you have that year. In Spain dividends, interest and capital gains all land on the same savings scale, so anything else you earn there pushes the dividend into the higher bands. Spain also gives you no choice about how the dividend is taxed: that scale is the only route, whatever you have read about other countries letting you elect a flat final rate instead.
  • Wealth tax. Spain taxes net wealth, your shares are an asset, and none of it is in this model.
  • Region. For dividends, none. The savings scale is national. For salary, plenty.
  • The minimum tax. The 15% floor only applies from €20,000,000 of prior-year turnover, or inside fiscal consolidation. Your company is not in scope. Stop worrying about it.

Questions people actually ask

Should I pay myself a salary or dividends in Spain?

Most owner-managers end up doing both. A salary is deductible for the company and reduces its corporate tax, but it lands on the progressive general scale and carries social security contributions. A dividend saves the company nothing and is taxed on the flatter savings scale with no contributions. Which mix wins depends on your corporate tax rate, your marginal personal rate in your autonomous community, and whether you want the contribution record. Anyone quoting you one universal optimal salary is guessing.

Does Spain give a credit for corporate tax already paid when I take a dividend?

No. Spain runs a classical system for resident individual shareholders: the corporate tax the company paid is not credited against your IRPF. The tax withheld when the dividend is paid is only an advance on your own income tax, not relief for the company-level tax. The same profit is taxed at both levels, which is exactly what the total-rate column above shows.

How long does the reduced corporate tax rate for new companies last in Spain?

It applies in the first tax period in which the company has a positive tax base and in the following one. That is two profitable periods, not two years from incorporation. If the company loses money for its first three years, the clock has not started yet. It also does not apply to patrimonial entities, to members of a group, or where the same activity was previously carried on by you as an individual or by a related party.

Do I pay less dividend tax in Madrid than in Catalonia?

No. The savings scale that taxes dividends is set entirely by state law and is the same across the whole country, so moving between autonomous communities does not change the dividend bill. Salary is different: the general scale is state plus regional, and the regional half varies. Region shopping affects the salary route, not the dividend route.

Does the minimum corporate tax apply to my small company?

Almost certainly not. The minimum-tax rule only reaches companies with net turnover of at least twenty million euros in the twelve months before the tax period starts, or companies inside the fiscal consolidation regime. A standalone founder-owned company is outside its scope, whatever you have read about it.

What this assumes

This calculator is for information only and is not tax advice. Rates and thresholds change; check the methodology page for sources and verification dates, and confirm your own situation with a qualified adviser.