With the October Modelo 202 deadline approaching, companies subject to Corporation Tax should review how their advance payment is calculated and what information is taken into account.
Modelo 202 payments are made on account of the company’s final Corporation Tax liability and are later taken into account when the annual Modelo 200 is filed. Understanding how the October payment is calculated can therefore help companies anticipate the amount due and understand how it will affect their final Corporation Tax position.
For more information on the requirements and filing process, see our article about What is Modelo 202, Who Must File It and How to File It?
Modelo 202: the October payment
Modelo 202 is filed during the first 20 calendar days of April, October and December. The October payment is therefore the second advance payment of the year and the first one taking into account the 2025 Corporation tax, filed in July.
The information used to calculate the payment depends on the method applicable to the company.
How is the payment calculated?
General method
Under the general method, the payment is based on the Corporation Tax liability from the relevant previous tax period.
After taking into account the applicable deductions, tax reliefs, withholdings and payments on account, 18% is generally applied to the resulting amount, regardless of the Corporation tax rate applicable for the company. For companies on losses during the previous Corporation tax return, this form is generally not applicable.
Current-year taxable-income method
Under the current-year method, the calculation is based on the taxable income accumulated during the current tax year, rather than primarily on the Corporation Tax liability from the previous year.
For companies using this method, the base is calculated using the taxable profit for the previous months of the year. For example, the payment due in October is calculated using the taxable profit for the first nine months of the year.
The applicable percentage is generally calculated as five-sevenths of the applicable Corporation Tax rate, rounded down to the nearest whole percentage point. Applicable deductions, tax reliefs, withholdings and previous advance payments are then taken into account.
This method is particularly relevant from 2026 onwards because certain Corporation Tax rates are being progressively reduced for microenterprises and companies qualifying as reduced-size companies. As the payment percentage under this method is linked to the applicable Corporation Tax rate, these changes can also affect the percentage used to calculate Modelo 202.
The current-year method can be particularly useful for companies whose profits are expected to be significantly lower during the current year than in the previous year. Instead of basing the payment primarily on the previous year’s tax liability, the calculation reflects the taxable income generated during the current tax year up to the relevant payment date.
For example, a real estate company could have had a particularly profitable previous year due to significant property sales, but expect substantially lower profits in the current year because it does not anticipate any significant sales. In such circumstances, the current-year method may result in a payment that better reflects the company’s current taxable position.
How are these payments applied in the Corporation tax?
Modelo 202 payments are payments on account of Corporation Tax, rather than an additional tax.
When the company files its annual Modelo 200, its final Corporation Tax liability for the year is calculated. The payments already made through Modelo 202 are then taken into account.
If the final tax liability is higher than the advance payments already made, the company will only need to pay the difference. If, on the contrary, the payments on account exceed the final liability, the excess will be refundable.
This is why Modelo 202 and Modelo 200 should be viewed as part of the same Corporation Tax process: Modelo 202 allows tax to be paid in advance during the year, while Modelo 200 determines the final tax position for the year.
