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Tax planning before the year-end: 5 rules for companies
Step Inside Accounting · Practical guide
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1. Estimate the year’s result
Ask your accountant for an estimate of the profit to the end of the year, using the figures from January to October and what you still expect to invoice and spend. It is the basis for every December decision.
With that estimate you know how much corporate tax (IRC) you will pay on 2026: 15% on the first €50,000 of profit for SMEs and 19% on the rest. You also know whether the payments on account already made this year are enough.
Example
A company expects €30,000 of profit in 2026. The estimated IRC is €4,500 (15%), plus the municipal surcharge (derrama) if the municipality charges it.
2. Bring forward the purchases you were going to make anyway
A purchase made by 31 December counts for this year. If you were going to replace a computer or phone, or buy software, in January, buying in December already reduces the 2026 profit. It only makes sense for purchases the company needs: buying just to pay less tax almost never pays off.
Assets of up to €1,000 can be expensed in full in the year of purchase. Above that, the cost is spread over several years and, for a purchase made in December, counts for little in 2026. See depreciation explained simply.
3. Check your invoices and gather the documents
Check in e-fatura the invoices issued with the company’s tax number (NIF) and make sure they have all reached your accountant. A company expense with an invoice in your personal name does not count as a cost. See what an invoice must include and which expenses are deductible.
Use the moment to gather what is usually missing at closing:
- Bank statements for all company accounts up to 31 December.
- Invoices for insurance, software, phone and travel.
- New contracts of the year (lease, leasing, loans).
- Travel logs and travel allowances.
4. Decide on the third payment on account
The third payment on account is due by 15 December. If the first two payments already cover the estimated IRC for 2026, the company may skip it. If they only cover part, it can pay just the difference.
The decision must be based on an up-to-date estimate. If, in the end, more than 20% of what would have been due in that third payment is left unpaid, compensatory interest applies. See IRC payments on account.
Example
Based on last year’s IRC, the company has three payments on account of €1,600. In July and September it paid €3,200. If the estimated IRC for 2026 is €4,500, €1,300 is missing: in December it can pay €1,300 instead of €1,600.
5. Prepare 2027: profits, salary and meal allowance
Before the annual accounts are approved, decide how much profit stays in the company and how much goes out as dividends. Profit that stays in the company strengthens its equity and lets it deduct part of it from taxable profit for seven years, through the ICE. Dividends pay 28% income tax (IRS). See how to pay less IRC by keeping profits in the company.
Also review the managing partner’s salary and the meal allowance for 2027. The minimum wage is expected to rise to €970 in January. The meal allowance pays no IRS up to €6.15 a day in cash or €10.46 on a meal card (2026 figures). See the managing partner’s salary in 2027.
Team tip
Book a meeting with us in the first half of December, before the deadline for the third payment on account. Bring the list of what you plan to buy before the end of the year and what you have decided about the profits. After that, the next step is closing the accounts and the IES.
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This article is for information only and does not replace professional advice. Figures and rules are those in force at the date of publication and may change.
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