Key tax developments for 2025: what businesses need to know

The year 2025 brings with it important tax developments, which all companies should be aware of, in relation to Corporate Income Tax ("IS"), Personal Income Tax ("IRPF") and electronic invoicing.

Specifically, these changes are introduced by Law 7/2024, of 20 December, which establishes a Complementary Tax to guarantee a global minimum level of taxation for multinational groups and large national groups; by Royal Decree 9/2024, of 23 December, which adopts urgent measures in economic matters,  tax, transport, and Social Security, and certain measures are extended to deal with situations of social vulnerability; and by Royal Decree 10/2024, of 23 December, for the establishment of a temporary energy levy during the year 2025.

In this article, we break down the main tax developments  for this year 2025, some with effect from 1.1.24, to properly comply with the regulations and, in addition to avoiding possible penalties, to take advantage of the benefits that may be applicable to your company.

1. Corporate Income Tax

These are the tax novelties for 2025, some with effect from 1.1.2024, in relation to the Corporate Income Tax: 

(i) Limits applicable to large companies in tax periods beginning on or after 1 January 2024

With effect for tax periods beginning on or after 1 January 2024, the limit on the offsetting of negative tax bases ("BINs") for large companies, with a net turnover ("INCN") of at least 20 million euros,  is recovered, accompanied by a new limit on the application of deductions for double taxation international or domestic, generated or pending compensation, in order to ensure that, in those tax periods in which there is a positive tax base, the application of tax credits, by large companies, does not cancel the differential quota to be paid.

Thus, taxpayers whose INCN is at least 20 million euros during the 12 months prior to the start of the tax period, will only be able to offset 50% or 25% of the previous positive tax base, according to the INCN of the previous year (i.e. less or more than 60 million euros).

On the other hand, the amount of deductions for double taxation may not exceed 50% of the taxpayer's total tax liability.

(ii) Temporary measures in the determination of the taxable base in the tax consolidation regime as of 1 January 202

With effect for tax periods beginning on or after 1 January 2024, the measure provided for tax periods beginning in 2023, consisting of the non-inclusion in the consolidated tax base of a tax consolidation group of 50% of the individual BINs of the entities that make up said group, is extended for that year and for the following year.

In successive tax periods, individual BINs not included in the tax base of the tax group must be integrated by tenths, even if any entity in the group with individual BINs is excluded from the group.

In the event of loss of the tax consolidation regime or extinction of the tax group, the amount of the individual BINs that is pending integration into the group's tax base will be integrated in the last tax period in which the group is taxed under the tax consolidation regime.

(iii) Capitalization reserve

With effect for tax periods beginning on or after 1 January 2025, the tax incentive of the capitalisation reserve is modified, with which it is intended to boost business capitalisation by increasing net worth by introducing the following improvements:

1. The percentage of reduction in the taxable base is increased, from 15% of the increase in equity to 20%.

2. This incentive is enhanced by linking it to the increase in the total average workforce compared to the previous year, provided that this increase is maintained for three years.

The increases in the reduction of the taxable base depending on the increase in the workforce are as follows:

• 23%: if the average workforce in the tax period has increased, with respect to the workforce of the previous tax period, by a minimum of 2% without exceeding 5%;
• 26.5%: if the increase in the average workforce in the previous tax period is between 5 and 10%; and
• 30%: if the increase in staff is greater than 10%.

3. The amount of the reduction may not exceed 20% of the taxable base prior to the reduction and compensation of BINs, or 25%, in the event that the INCN is less than 1,000,000 euros, during the 12 months prior to the date on which the tax period to which this reduction corresponds begins.  although the amounts pending reduction may be applied in the tax periods ending in the two immediate and following years.

(iv) Tax rate of small entities

With effect for tax periods beginning on or after 1 January 2025,  the tax rate applicable to small entities that are not considered to be holding entities will be as follows:

1. For micro-SMEs (INCN previous year < 1 million euros): 17% for the part of the taxable base between 0 and 50,000 euros. For the remaining part of the base, the rate will be 20%.
2. For small entities (INCN for the previous year greater than 1 million euros and less than 10 million euros): 20%.

In addition, these tax rates will be reduced during the years 2025 to 2028 as set out below:

(v) Freedom of depreciation on investments that use energy from renewable sources

With effect for tax periods beginning on or after 1 January 2025, the freedom of depreciation established for investments using energy from renewable sources is extended by one more year.

Let us remember that, with effect from 1 January 2023, taxpayers for Corporate Income Tax could freely depreciate investments made in facilities for self-consumption of electricity, as well as those installations for thermal use for own consumption, provided that they used energy from renewable sources and replaced facilities that used energy from non-renewable fossil sources.

The characteristics of this temporary regime of freedom of depreciation are summarised below:

1. Assets eligible for depreciation: 

• Investments in installations for the self-consumption of electricity that use energy from renewable sources; and
• Installations for thermal use for own consumption that use energy from renewable sources, which replace installations that use energy from non-renewable fossil sources.

2. Assets not eligible for depreciation:

• Buildings; and
• Installations that are mandatory by virtue of the regulations of the Technical Building Code, approved by Royal Decree 314/2006, of 17 March, unless the installation has a nominal power greater than the minimum required, in which case the part of the cost of the installation proportional to the installed power above that minimum required may be subject to freedom of depreciation.

3. Maximum amount of investment: investments up to 500,000 euros may benefit from the free depreciation regime.

4. Requirements:

• It is required that during the 24 months following the start date of the tax period in which the acquired elements come into operation, the total average workforce of the entity is maintained with respect to the average workforce of the previous twelve months.
• Taxpayers must be in possession, as appropriate, of the following documentation proving that the investment uses energy from renewable sources:
  • In the case of electricity generation, the Operating Authorisation and, in the case of facilities with surpluses, the accreditation of registration in the Administrative Register of Electricity Production Facilities (RAIPREE) or, in the case of installations of less than 100kW, the Certificate of Electrical Installations (CIE) in accordance with the Low Voltage Electrotechnical Regulations.
  • In the case of renewable gas production systems (biogas, biomethane, renewable hydrogen), accreditation of registration in the Register of Gas Production Facilities from Renewable Sources.
  • In the case of industrial or process thermal (heat and cold) renewable energy generation systems, accreditation of registration or report from the competent body in the Autonomous Community.
  • In the case of thermal renewable energy generation systems (heat and cold) for air conditioning or domestic hot water generation, an energy efficiency certificate issued by the competent technician after the investments have been made, indicating the incorporation of these systems with respect to the certificate issued before the start of the investments.

2. Personal Income Tax 

(i) Increase in the savings tax rate

As a fiscal novelty for 2025, and with effect from 1 January 2025, the tax rate applicable to taxable bases over 300,000 euros is increased, from 28 to 30%.

In this way, the rate applicable to the BI of savings will be as follows:

(ii) Deduction for works to improve the energy efficiency of homes

The validity of the deductions for energy efficiency is extended for another year.

Let us briefly recall these three deductions:

1. Deduction for improvement works for the reduction of heating and cooling demand 

• Type of dwelling in which the works are to be carried out: they may be carried out in the main residence or rented dwellings or in expectation of rental and provided that they are rented before 31 December 2026. It does not apply to works carried out in second homes, tourist homes, parts affected by economic activity, parking spaces, storage rooms, gardens, swimming pools, sports facilities and similar elements.
• Deadline for carrying out the works: 6 October 2021 to 31 December 2025, both inclusive.
• Amount of the deduction: 20% of the amounts paid with the limit of 5,000 euros.

2. Deduction for improvement works that reduce the consumption of non-renewable primary energy

• Type of dwelling in which the works are to be carried out: they may be carried out in the main residence or rented dwellings or in expectation of rental and provided that they are rented before 31 December 2025. It does not apply to works carried out in second homes, tourist homes, parts affected by economic activity, parking spaces, storage rooms, gardens, swimming pools, sports facilities and similar elements.
• Deadline for carrying out the works: 6 October 2021 to 31 December 2025, both inclusive.
• Amount of the deduction: 40% of the amounts paid with the limit of 7,500 euros.

3. Deduction for energy rehabilitation works of buildings for predominantly residential use

• Type of dwelling in which the works are to be carried out: they may be carried out both in the main residence, as well as in second homes or in rented dwellings. Garage spaces and storage rooms acquired with them are assimilated to homes. It does not apply to works carried out in the part of the dwelling affected by economic activity.
• Deadline for carrying out the works: 6 October 2021 to 31 December 2025, both inclusive.
• Amount of the deduction: 60% of the amounts paid with the limit of 5,000 euros.

(iii) Deduction for the acquisition of "plug-in" and fuel cell electric vehicles and charging points

The validity of the deduction for the acquisition of "plug-in" electric vehicles and fuel cell vehicles is extended until December 31, 2025.

1.

Scope of application: Acquisition of new electric vehicles acquired between 30 June 2023 and 31 December 2025, as well as for payments on account made to the seller from 30 June 2023 to 31 December 2025, representing at least 25% of the acquisition value of the seller.

The vehicles must not be used for economic activities, must be included in the IDEA vehicle database and must belong to one of the following categories: M1 passenger cars, L6e light quadricycles, L7e heavy quadricycles, L3e, L4e and L5e motorcycles.

In addition, the price of the vehicle may not exceed the maximum amount established, where appropriate, for each type of vehicle in Annex III of Royal Decree 266/2021, of 13 April.

2. Amount of the deduction: 15% of the purchase value of electric vehicles or payments on account with a limit of 20,000 euros.

(iv) Installation of battery charging systems

The validity of this deduction is also extended until December 31, 2025.

1. Scope of application: Installation during the period between 30 June 2023 and 31 December 2025, in a property owned by the taxpayer, of battery charging systems for electric vehicles not affected by an economic activity.

2. Amount of the deduction: 15% of the amounts paid for the installation of the aforementioned charging systems with a limit of 4,000 euros.

(v) Donations to workers affected by the DANA by companies

The amounts paid extraordinarily by employers to their employees and/or family members that are intended to cover personal injuries and material damage to homes, belongings and vehicles suffered by employees and/or their family members on the occasion of the Isolated High Level Depression (DANA) that occurred in 2024 are declared exempt from both Personal Income Tax and Inheritance and Gift Tax.

(vi) New tax reduction for certain income from artistic activities obtained on an exceptional basis

With effect from 1 January 2025, a tax reduction is regulated for certain income from artistic activities obtained exceptionally.

3. Electronic invoice

And as a last tax novelty, a public electronic invoicing solution is regulated for the new VeriFactu system, which is expected to come into force on January 1, 2026, which can be used by those entrepreneurs and professionals who do not choose to make use of a private invoice exchange platform.

In summary, it consists of the following:

1. Entrepreneurs or professionals must send a true copy of each invoice to the public solution at the time of its issuance and expressly inform the recipient of the invoice.
2. Recipients of electronic invoices, who do not use the public invoicing solution, will be obliged to electronically report the full payment or rejection of invoices.
3. The data stored in the public e-invoicing solution will be confidential and will be protected by the same security measures as data with tax significance, in accordance with the General Tax Law. This data may only be used for purposes related to the tax and customs system, and may be transferred to the Tax Administrations of the Basque Country, Navarre and other Administrations.
4. Electronic invoices stored in the public e-invoicing solution will be kept on that platform for up to a maximum of 12 years.
5. The State Tax Administration Agency may restrict in whole or in part, in a proportionate manner, the exercise of the right of access and rectification when it hinders administrative actions aimed at ensuring compliance with tax obligations or when it jeopardizes an ongoing tax investigation.
6. Due to their regional regime, the application of this regulation to entrepreneurs and professionals in the foral territories of the Basque Country and Navarre will be in accordance with their respective economic agreements and the principle of collaboration between the Provincial Treasuries and the State Tax Administration Agency.

If you have any questions about your company's tax planning, taking into account all these changes, you can contact with our expert tax lawyers here.

Ignacio Blázquez

Manager in the tax department