Tax updates for companies in the Basque Country in 2025 and 2026

In the Basque Country, companies face significant changes in tax regulations for 2025 and 2026. These modifications, approved through various Foral Norms (2/2025, 3/2025 and 1/2025) in the historic territories of Bizkaia, Álava, and Gipuzkoa, aim to promote equality, sustainability, energy efficiency, and tax transparency, while introducing technical adjustments in areas such as holding companies and Corporate Tax. Let’s see what the tax updates for companies in the Basque Country are.

Next, we analyze the five key updates.

 

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New deductions to promote work-life balance

New tax deductions have been introduced aimed at fostering equality and work-life balance, including:

• Deductions applicable to business expenses linked to reconciliation policies, such as flexible working hours, teleworking, or care services. To apply the deduction, the company must develop a Work-Life Balance Plan.
• Deductions for hiring young people under 36 years old and women (regardless of age) on permanent contracts. The deduction will be 35% of the gross annual salary of the hired individuals, capped at the current minimum wage at the time of hiring.

These deductions may reduce the Corporate Tax liability.

Tax regime for rentals of holding companies

The taxation of real estate income generated by holding companies is modified, aligned with the reforms applied to Personal Income Tax regarding housing:

• Access to tax reductions is limited when rents do not correspond to genuine economic purposes.
• A more uniform and stricter taxation is established to avoid the instrumental use of companies for tax deferral purposes.

This measure will particularly impact companies with significant passive income derived from property rentals without demonstrable economic activity.

Enhanced deductions in R&D&i and sustainability

Deductions for R&D&i and sustainability-related activities have been expanded and detailed:

• Expenses in circular economy, energy efficiency, decarbonization, and use of recycled raw materials are now deductible.
• They can be applied in both industrial and service sectors, provided there are measurable impact indicators.
• Deduction bases may be applied with greater flexibility and, in some cases, accumulated or monetized.

These improvements aim to align the Basque tax system with the European Green Deal and ecological transition goals.

New Corporate Taxation on extraordinary profits

Bizkaia, Álava, and Gipuzkoa incorporate an additional surcharge on Corporate Tax that will apply to companies whose profits in one fiscal year exceed the average of positive results of the previous three fiscal periods.

This new rate only affects the excess extraordinary profit and is justified for reasons of tax fairness and redistribution, similar to extraordinary surcharges applied in other European countries.

Adjustments in taxation of holding companies and minimum taxation

The taxation scale of holding companies is aligned with recent reforms in savings income of Personal Income Tax. This implies:

• Greater progressivity depending on the volume and type of income generated.
• Elimination of tax advantages for structures without real economic activity.

Additionally, an effective minimum taxation is established for entities with the general Corporate Tax rate, limiting excessive reduction of the tax due through deductions or tax benefits.

With this, the Foral Tax Authorities seek to guarantee an effective minimum taxation, aligned with OECD standards and fair international taxation.

✅ Is your company ready for the tax changes in Euskadi?

At Adlanter, we offer comprehensive support so you can optimize your tax burden and adapt to the tax updates for companies in the Basque Country. Check out our tax management services and let us handle your filings and procedures so you can focus on your business.