The accounting profit's relevance in collecting tax revenue of Spain

Abstract

The main goal of this research is to study the role of the accounting profit in the Spanish corporate tax collection. For this purpose, it analyses the legal dispositions of Spain, in particular, the Commerce Code - Código do Comercio (CC), the Accounting Law - Plan General de Contabilidad (PGC), and the Corporate Income Tax Law - Ley del Impuesto sobre Sociedades (LIS). The results show that the profit determined under the accounting standards' rules has a crucial role in the Spanish tax jurisdiction. It has express prevision in several business legal norms, and it constitutes an essential element in the determination of business taxation. The accounting standards' discretion and the manipulation of accounting profit can be reasons for the reduced contribution to income corporate tax revenues by societies.