The Government of Spain reduces the taxation of startups from 25% to 15% for a maximum of four years - Start Up Gazzete
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The Government of Spain reduces the taxation of startups from 25% to 15% for a maximum of four years


The Government today launched the draft bill on startups for a public hearing, which incorporates a series of tax measures to favor the creation and implementation of this type of emerging companies, including a reduction in the corporate tax rate of 25%. at 15% up to a maximum of four years.

This was announced today by the Second Vice President and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, at the press conference after the Council of Ministers, where she indicated that the objective of these measures is to promote this type of company, attract investment and talent to the country, turn Spain into a European hub for entrepreneurship and align with the leaders of technological entrepreneurship.

The Government considers startups or emerging companies to be those that have their registered office and more than half of the employment in Spain, an antiquity of less than five years (extendable to seven in the biotechnology, energy and industrial sectors) and are not a listed company . Likewise, they must not have distributed dividends, they must be innovative and have a turnover of less than five million euros.

To promote this business ecosystem, Calviño has highlighted that the Draft Bill includes different measures that address the specificities of these companies, including tax benefits and instruments to support investment and attracting talent.

On the first point, in addition to the reduction of the tax rate in the corporate tax and the income tax of non-residents of the general rate from 25% to 15% for a maximum of four years, deferrals of tax debts are foreseen and Favorable measures for stock options (options on shares of the company itself as a means of payment or remuneration for startup workers). The text raises the amount of the exemption from 12,000 to 45,000 euros per year in the case of delivery of these stock options.

The draft also creates a favorable tax regime for what is known as “digital nomads”, those teleworkers displaced to Spanish territory. In this sense, the intention of the Government is that they be allowed to submit to the income tax of non-residents, relaxing the requirements to access this regime. Another proposed measure is the creation of a specific visa for people who work in Spain for a foreign company, including the audiovisual sector.

To encourage investment in startups by figures such as business angels, Calviño has highlighted that the maximum deduction base for investment in newly created companies is raised from 60,000 to 100,000 euros per year. The type of deduction goes from 30% to 40%, and the period in which the company is considered to be newly created increases to a period of those five or up to seven years indicated.

Regarding the administrative procedures to facilitate the creation of this type of companies and reduce current obstacles, the obligation to make installment payments of corporation tax and non-resident income tax is eliminated. The obligation to obtain the foreign identification number for non-resident investors is also eliminated, the tax identification number being sufficient for them. In addition, the Draft Bill also facilitates the creation of controlled test spaces, known as regulatory sandboxes, to adapt the regulatory framework to new business models, following the successful model that we have with the digital sandbox in the financial sphere.

This preliminary draft also facilitates collaboration between startups and other companies, as well as permeability with universities and research centers, innovative public procurement by the Administration is favored, and entrepreneurship outside the existing urban poles, in order to promote innovation and economic growth throughout the Spanish territory.


“With this draft bill we intend to help modernize our productive fabric, thanks to the support of digital technologies,” Calviño remarked, indicating that the text is part of one of the structural reform axes of the recovery plan for improve business demographics and business climate.

This is one of the reforms included in the Recovery, Transformation and Resilience Plan presented by the Executive with the ultimate goal of recovering growth after the scourge of the coronavirus pandemic, fostering the creation of companies and accelerating the generation of employment.

The draft bill establishes a specific framework to boost the creation of start-ups in Spain and attract investment and talent.

Digital nomads

One of the measures it includes is to soften the initial taxation of start-ups, with a reduction in the corporate tax rate from 25% to 15% for up to four years. In addition, the maximum deduction base for investment in new or recently created companies is raised.

The use of stock options as a form of employee remuneration is also favored and the minimum exemption is raised from 15,000 to 45,000 euros.

In order to favor the installation in Spain of the so-called digital nomads, a new type of visa will also be created for teleworkers.

Once approved, the text will be submitted to a public hearing so that the interested parties can make their contributions, with the ultimate intention that the law will be passed with the greatest possible consensus.


Author avatar
Joshua Smith

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