The end of October marks the start of the final countdown for the 2026 tax year. With the third-quarter returns already filed and the Q3 tax closing behind us, the most profitable and preventive stage of tax management begins: year-end tax planning.
Many business owners make the mistake of looking at their taxes in July of the following year, when the annual Corporate Tax return (Form 200) or the personal income tax return is filed. By then, however, there is no room for manoeuvre. Decisions with a real tax impact —bringing investments forward, setting up reserves or structuring incentives— must be made before the year closes on 31 December.
At Ruiz & Asociados we set out the most effective legal and tax levers to reduce the corporate and personal tax burden legitimately and with full legal certainty.
🏢 Priority strategies for companies (Corporate Tax)
Companies under the general regime or classed as small companies (ERD) have powerful tax incentives to reduce their taxable base:
CORPORATE TAX REDUCTION TOOLS
┌────────────────────────────────────────────────────────────────────────┐
│ CAPITALISATION RESERVE │ Incentive for self-financing. │
│ (Art. 25 LIS) │ 10% (or higher) reduction in the base. │
├──────────────────────────────┼─────────────────────────────────────────┤
│ LEVELLING RESERVE │ SMEs (ERD) only. │
│ (Art. 105 LIS) │ Reduction of up to 10% of the profit. │
├──────────────────────────────┼─────────────────────────────────────────┤
│ ACCELERATED AND FREE │ Digitalisation, energy efficiency │
│ DEPRECIATION │ and job creation. │
└──────────────────────────────┴─────────────────────────────────────────┘
1. Capitalisation reserve: rewarding self-financing
It rewards companies that reinvest their profits in equity instead of distributing them. It allows a reduction in the taxable base of 10% of the increase in equity, provided that the increase is maintained for 5 years and a restricted reserve is set up for the same amount. It is the ideal complement for companies grown through bootstrapping in 2026.
2. Levelling reserve: offsetting future losses in advance
A flexibility mechanism designed specifically for SMEs (turnover below €10 million). It allows the positive taxable base to be reduced by up to 10% of its amount (with a limit of €1 million). The reduction is offset against any tax losses the company generates over the following 5 years; if no losses arise, the reserve is added back in the fifth year, working as a cost-free tax deferral.
3. Accelerated depreciation and technology investments
Companies that have acquired fixed assets or invested in digital transformation, energy efficiency or integrated accounting technology before the end of the year can apply depreciation rates multiplied by 2 (accelerated depreciation) or even free depreciation if the investments come with maintaining or increasing headcount.
4. Supporting intra-group expenses and related-party transactions
If your business group invoices management fees, participating loans or royalties between entities of the same group, make sure these payments are adjusted before the year end. These transactions must be strictly aligned with market prices and backed by the corresponding related-party transactions and transfer pricing file to avoid adjustments in a possible tax audit.
👤 Priority strategies for the self-employed and executives (personal income tax)
For independent professionals and directors who pay personal income tax (IRPF), the last two months of the year are the time to fine-tune net income:
1. Maximising employment pension plans
While individual pension plans keep a very low contribution cap (€1,500), employment pension plans promoted by the company or for self-employed workers allow up to €8,500 in additional contributions. The total contributed is deducted directly from the taxable base at the highest marginal rate, giving a direct saving on the tax bill.
2. Offsetting capital gains and losses
If you have made capital gains during the year (from selling property, shares or other assets), consider realising capital losses on loss-making investments before 31 December. The rules allow gains to be offset against losses made in the same year (and up to 25% of income from movable capital).
3. Reviewing flexible remuneration and incentives
Including corporate health insurance, nursery vouchers or meal vouchers in the pay of employees and executives is a deductible expense for the company and tax-exempt income for the employee. In fast-growing projects, granting Phantom Shares as a talent-retention formula also defers the tax until the amount is actually paid.
🗓️ Preventive roadmap for November
To reach December with decisions made and documented, we recommend following this work schedule:
- Provisional accounts closing at 31 October: get the cumulative profit and loss account for the first ten months to project the year’s tax result.
- Review of equity and reserves: check whether you can set up the capitalisation or levelling reserve.
- Review of family governance: in family groups, confirm that directors’ pay meets the requirements of the family protocol and the wealth tax exemption regime.
- Check the electronic mailbox: make sure there are no pending notifications or requests in the DEHú and the AEAT e-office.
To consult the rules on tax credits and the requirements for 2026, you can refer to Law 27/2014 on Corporate Tax in the Official State Gazette (BOE) or the guides published by the Spanish Tax Agency.
🏢 Ruiz & Asociados: forward-looking tax management for your company
At Ruiz & Asociados we have spent more than three decades helping SMEs, large companies, family wealth and entrepreneurs design smart, optimised year-end closings. 🤝
Our team of economists and tax consultants simulates your tax scenario weeks in advance, identifying every deduction, allowance and reinvestment relief your company is entitled to so that you do not pay a single euro more than necessary.
Would you like to close 2026 knowing every tax item has been optimised? The time to act is now. Contact our firm today and book your year-end tax planning session. 🚀
