Corporate income tax
The tax treatment of corporate loans is set out in the Corporate Income Tax Code. Capital income (including interest and other amounts receivable under a loan) is included in a company's profits under the Code. Company profits are taxed as follows:
The net profits are taxed at the general corporate income tax rate of 25%.
The gross profits (before the deduction of any carried-forward tax losses) are subject to a 1.5% local corporate tax.
Small companies are taxed at a lower corporate income tax rate of 20% under the simplified tax regime (together with the 1.5% local corporate tax).
The simplified tax regime is an optional regime that it is available to any small company, other than a Sociedade Anónima (SA) (that is, a public company limited by shares). The small company must have an annual turnover that does not exceed EUR149,639.37 (about US$197,564) in the previous year, and meet certain accounting conditions (for example, it does not choose the organised accounts regime (see Question 4, Withholding tax)).
Under this regime, tax is charged on the annual gross income less a predetermined percentage of presumed costs. Tax is charged at the following rates:
20% of the sales income.
45% of other income (for example, income derived from supplying services).
If chosen, the regime applies for a minimum period of three years.