Corporate tax instalment payment options in February

The option of payment in instalments of the Corporate Tax that suits you best, a relevant opportunity that you can take advantage of during the month of February.

Why is the option to pay in instalments important?

For those whose income in 2023 did not exceed six million euros and whose tax year coincides with the calendar year, February is the key month to reconsider how to calculate your 2024 Corporation Tax prepayments.

As corporate taxpayers, you are obliged to make a payment in instalments, i.e. an advance payment of the tax settlement for the current tax period on the first day of April, October and December. This instalment payment is considered a tax debt.

How you can benefit from the instalment payment option

If your company's income has fallen significantly, it is likely to be in your interest to reduce your corporate income tax instalments this year. In particular, if your company calculates advance payments second the instalment system, check whether switching to the base system may be beneficial.

Available options:

1- Instalment system: 

• The first instalment payment, due next April, will be 18% of the 2022 corporate income tax liability.
• The payments in October and December will be 18% of the tax payable after filing the 2023 tax return.

2- Basis system:

• Applying this system, the fractioned payments during the year will be 17% of the taxable base accumulated from the start of the financial year until the day before the start of each income period.
• New advantage: If your company's turnover was less than one million euros in 2022, from this year onwards, the percentage will be only 16%, applicable to companies with a turnover of less than one million euros and taxed at 23% from 2023.

Why consider the change to the base system?

• It may be beneficial if you anticipate that your results in 2024 will be lower in other years.
• Examples include one-off sales in 2022 or 2023 that will not be repeated in 2024, or if you anticipate lower sales or higher expenses in the coming year.