Tax Commentary 7-2014
The new Corporate Income Tax Law
Corporate Income Tax Law 27/2014, of November 27, 2014 (“Law 27/2014” or the “New Law”) was published in the Official State Gazette on November 28, 2014 and replaces the former law on this tax, the revised Corporate Income Tax Law (the “Revised Law”), approved by Legislative Royal Decree 4/2004, of March 5, 2004. Unlike what has occurred with other taxes, the much-discussed corporate income tax reform has not translated into the amendment of certain articles in the existing law but rather into the emergence of a completely new law repealing the former one.
Corporate income tax is a direct tax of a personal nature that is levied on the income of legal entities. The New Law maintains the basic structure of the tax, in which the tax base is determined by income/loss per books. As indicated in its preamble, Law 27/2014 stems from an overhaul of the former law, which was full of ad hoc amendments introduced, particularly in recent years, and includes a raft of new provisions.
Because of its significance, we have been following this new law’s passage through parliament and we have published a commentary with the main new features contained in its preliminary bill and another with the new features included in the bill. In this commentary we now take a look at the definitive wording of the law.