CIT Rate
The standard CIT rate is reduced by 1 percentage point, dropping to 20%.
SMEs and Small Mid Caps are now subject to an CIT rate of 16% (previously 17%) on the first € 50,000 of taxable income.
The standard CIT rate is reduced by 1 percentage point, dropping to 20%.
Autonomous Taxation
There is a reduction in autonomous taxation on expenses related to passenger cars, certain light commercial vehicles, motorcycles, or motorbikes.
| 2024 | 2025 | ||||
Brackets
|
Rates
|
Brackets
|
Rates
|
||
|---|---|---|---|---|---|
| Less than € 27,500 | 8.5% | Less than € 37,500 | 8% | ||
| Equal to or greater than € 27,500 and less than € 35,000 | 25.5% | Equal to or greater than € 37,500 and less than € 45,000 | 25% | ||
| Equal to or greater than € 35,000 | 32.5% | Equal to or greater than € 45,000 | 32% | ||
Expenses incurred with shows offered to clients, suppliers, or any other people or entities no longer qualify as representation expenses, hence not subject to autonomous taxation.
The increased rate by 10 percentage points is not applicable in the 2025 tax year when:
(i) the taxpayer has obtained taxable profit in one of the three previous tax periods and has timely fulfilled the declarative obligations related to the submission of the CIT return and the Annual Statement for the two previous tax years; or
(ii) the 2025 tax year corresponds to the start-up tax year or one of the two subsequent years.
Check the impact of changes to autonomous taxation here:
| 2024 | 2025 SB | Impact | ||||||
| Cost
of vehicle acquisition |
Depreciation
(25%) |
Other
costs |
Autonomous
Taxation Rate |
Taxation
Rate |
Autonomous
Taxation Rate |
Taxation
Rate |
Reduction
(Absolute Value) |
Variation
|
|---|---|---|---|---|---|---|---|---|
| € 20,000 | € 5,000.00 | € 2,500.00 | 8.5% | € 637.50 | 8% | 600.00 | -37.50 | -5.88% |
| € 27,500 | € 6,875.00 | € 2,500.00 | 25.5% | € 2,390.63 | 8% | 750.00 | -1,640.63 | -68.63% |
| € 30,000 | € 7,500.00 | € 2,500.00 | 25.5% | € 2,550.00 | 8% | 800.00 | -1,750.00 | -68.63% |
| € 35,000 | € 8,750.00 | € 2,500.00 | 32.5% | € 3,656.25 | 8% | 900.00 | -2,756.25 | -75.38% |
| € 37,499 | € 9,374.75 | € 2,500.00 | 32.5% | € 3,859.29 | 8% | 949.98 | -2,909.31 | -75.38% |
| € 37,500 | € 9,375.00 | € 2,500.00 | 32.5% | € 3,859.38 | 25% | 2,968.75 | -890.63 | -23.08% |
| € 40,000 | € 10,000.00 | € 2,500.00 | 32.5% | € 4,062.50 | 25% | 3,125.00 | -937.50 | -23.08% |
| € 45,000 | € 11,250.00 | € 2,500.00 | 32.5% | € 4,468.75 | 32% | 4,400.00 | -68.75 | -1.54% |
Conclusion
The greatest impact is observed in vehicles with acquisition costs between 35,000 € and 37,500 €, and this is due to two factors:
1) They now fall into the lower bracket (previously, they were in the upper bracket); and
2) The rate thus reduces from 32.5% to 8%.
Health insurance
Expenses incurred with health insurance for the benefit of employees, retirees, or their families, when considered a social benefit for CIT purposes, are now considered at 120% of their value.
2025 State Budget Law
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2025 State Budget
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