Changes to Corporate Income Tax and Personal Income Tax for this fiscal year

The fiscal year 2026 brings two relevant adjustments for companies and taxpayers: on the one hand, a new phased reduction of Corporate Income Tax for micro-enterprises; on the other, several updates in Personal Income Tax linked to conciliation/mediation agreements and the formalization of agreements, aimed at reducing litigation and procedures.

Corporate Income Tax: new rate for micro-enterprises in 2026

Since January 1st, micro-enterprises – with a turnover of less than one million euros – apply a reduced rate in two taxable base brackets:

• 19% for the first €50,000 of taxable base.
• 21% for the remainder of the taxable base.

This reduction is part of the already planned progressive reduction schedule, since in 2027 the scheme will change to 17% for the first 50,000 euros and 20% for the rest of the taxable base.

If your company falls within the microenterprise threshold, it is advisable to review accounting closings, installment payments, and results planning to properly utilize the applicable rate in each bracket, without losing sight of the economic consistency of income and expenses.

Changes in Personal Income Tax that affect severance pay, civil liability compensation and alimony payments

In the case of Personal Income Tax (IRPF), the most notable changes consolidate the tax effectiveness of certain formalized agreements, conciliation, mediation and equivalent means, expanding the exemptions provided.

In this regard, severance payments are exempt from personal income tax (IRPF) when they are agreed upon in a conciliation proceeding before an administrative service, such as the Mediation, Arbitration and Conciliation Service (MASC) or equivalent body, as a preliminary step to legal action in the labor courts. The key is the involvement of this conciliation body: if the amount is agreed upon in a private agreement without going through this formal process, the same exemption does not apply.

On the other hand, in the area of ​​civil liability for personal injury, the exemption from Personal Income Tax (IRPF) is extended to include compensation for physical or psychological damages, even if the amount is not fixed by law or court order, provided that the amount is determined through mediation or another legally established Alternative Dispute Resolution (ADR) mechanism. For the exemption to apply, certain formalization and guarantee requirements must be met, such as the involvement of a neutral third party, the execution of a public deed, and adherence to the limits established by the compensation scale or other applicable criteria.

In relation to the alimony payments for the benefit of the childrenIt is determined that the exemption in IRPF can be applied to the amounts received by the children when they are set in the regulatory agreement (art. 90 of the Civil Code or equivalent regional regulation) and said agreement is approved by the judicial authority, or formalized before a Legal Officer of the Administration of Justice or in a public deed before a notary, regardless of whether it comes from an MASC or not; that is, the exemption is linked to the formalization with guarantees of the regulatory agreement and not to “any private agreement” without that validation.

If you’re a micro-business or have a case involving compensation or agreements affected by changes in personal income tax, CINC can help. Contact CINC Asesoría and we’ll assist you.