New businesses (start-ups) have a tax break: everything you need to know
Take off with your start-up! Discover the tax benefits that will change the game for new businesses in Spain
New business initiatives, commonly referred to as “start-ups,” now have the opportunity to apply for accreditation that will open the doors to tax benefits designed especially for them.
Recent legislation for Start-ups
The legislation approved in December 2022, dubbed the “Start-up Law,” proposes significant tax relief for these companies. They are subject to a special tax rate of 15% during the first year in which they report a positive taxable base, and this benefit extends for an additional three years.
Key requirements to access this tax benefit
For these start-ups to enjoy this tax incentive, they must meet certain criteria:
Location in Spain: the company must have its main headquarters or a constant operational establishment in Spanish territory. Additionally, it is essential that 60% of its team has a formal employment contract in Spain.
Compliance with obligations: it is crucial that these companies have no outstanding debts with either the Tax Agency or Social Security.
Financial restrictions: these companies must not exceed an annual turnover of ten million euros. Those that have distributed dividends or, in the case of cooperatives, returns, are also excluded.
Innovative focus: the company must be centered on a project that brings innovation and has a business model that can grow and expand. This point will be validated by ENISA (National Innovation Company), which, after evaluation, will issue a corresponding certificate.
The certification process
To obtain the mentioned certificate, interested companies must go to ENISA’s online portal and provide all the required information. Once the application is submitted, ENISA has a period of three months to evaluate it and issue a response.
Crucial support for new business initiatives
This fiscal initiative is a breath of fresh air for start-ups in Spain. It allows them to significantly reduce their tax burden, which can make a big difference in their crucial early years of operation for consolidation and growth.
At García López Advisory, we are pleased to inform and guide you through this process. If your company is looking to take advantage of these benefits, do not hesitate to contact us for more details and specialized advice.”