Grupo Asegi has been handling foral Corporate Income Tax filings for companies in Bizkaia, Gipuzkoa and Araba since 1982. Foral Corporate Income Tax in Bizkaia applies a general rate of 24% (as against the state 25%), with reduced rates for SMEs, micro-enterprises and newly created companies, and deductions substantially more generous than the common regime.
Differences between foral and state Corporate Income Tax
Although the general structure of Corporate Income Tax is similar under both regimes, there are significant differences in tax rates, applicable deductions, certain deadlines and forms. The most relevant difference in economic terms is the deductions for R&D&I, job creation and reinvestment, all of them stronger under the foral regime.
Scope note: this article refers to the foral regime of the Autonomous Community of the Basque Country (Bizkaia, Gipuzkoa and Araba). Navarra has its own regime under the Economic Convention, with different rates, deductions and deadlines; if your company pays tax in Navarra, ask us about your particular case.
Tax rates in Bizkaia, Gipuzkoa and Araba
| Type of company | Bizkaia | Gipuzkoa | Araba |
|---|---|---|---|
| General rate | 24% | 24% | 24% |
| Small company | 20% | 20% | 20% |
| Micro-enterprise | 20% | 20% | 20% |
| Newly created company (first financial years with a profit) | 15% | 15% | 15% |
The most important foral deductions
R&D&I deduction
The deduction for R&D activities under the foral regime is one of the most generous in Europe. It applies percentages higher than those of the common regime to eligible costs. There are sub-types: Research and Development (R&D), with high percentages, and Technological Innovation, with lower but still significant percentages.
Deduction for job creation
The foral regime rewards the creation of stable employment (permanent contracts) with specific deductions.
Deduction for investment in assets
Investments in new fixed assets, especially those related to improving productivity, give rise to deductions on the amount invested.
Deduction for training
Staff training generates deductions on eligible training costs.
Step-by-step calculation of the foral taxable base
- Start from the accounting result before tax.
- Apply positive adjustments: accounting expenses that are not tax deductible.
- Apply negative adjustments: exempt accounting income.
- Obtain the preliminary taxable base.
- Offset negative taxable bases from previous financial years.
- Obtain the final taxable base.
- Apply the corresponding tax rate.
- Calculate the gross tax liability.
- Apply deductions and allowances.
- Obtain the net tax liability.
- Deduct withholdings and payments on account.
- Obtain the final balance (payable or refundable).
Deadlines and forms (foral Form 200)
The main return form is foral Form 200, similar but not identical to the state one. The filing deadline is the 25 calendar days following the 6 months after the end of the financial year: for a company whose financial year matches the calendar year, up to 25 July.
Instalment payments are made using foral Form 202, in three payments during the financial year (April, October and December).
Common mistakes we find in audits
- Failing to document R&D&I projects properly, which invalidates the deduction in an inspection.
- Applying job creation deductions without meeting the maintenance requirement.
- Not carrying out the off-book adjustments correctly.
- Confusing thresholds between the foral and state regimes.
- Not making use of the special capitalisation reserve or the levelling reserve.
Frequently asked questions
- What is the Corporate Income Tax rate for an SME in Bizkaia?
- The rate applicable to a small company in Bizkaia is 20%. For newly created companies, 15% during the first two financial years with a profit.
- Are foral deductions added to the state ones?
- No. A company taxed under the foral regime applies foral deductions exclusively.
- When is the foral Corporate Income Tax return filed?
- It is filed within the 25 calendar days following the 6 months after the end of the financial year. For a company with a 31 December year end, up to 25 July of the following year.
- Can I apply the R&D&I deduction without having spent much?
- The deduction is calculated on the costs actually incurred. There is no minimum threshold, but the costs must be documented technically.
- Does a new company pay less Corporate Income Tax in its first years?
- Yes. They apply the reduced rate of 15% during the first financial year with a positive taxable base and the one after it.
General information only; it does not replace professional advice. Foral legislation changes frequently — check the date it was last updated.