On December 27, 2021, the Draft Law for the promotion of the ecosystem of emerging companies was published in the BOCG. With this Bill, better known as the “Startup Law”, it is about promoting the creation and growth of innovative digital-based emerging companies and attracting talent and international investment.
We must point out that the tax changes introduced refer to newly created companies, “emerging companies”, with a seniority of up to 5 years (7 years, in the case of biotechnology, energy and industrial companies), which have their registered office or permanent establishment in Spain, that do not distribute or have distributed dividends, or are not listed on a stock market and that have an annual turnover of up to 5 million euros. The qualification of “emerging company” to qualify for the benefits must be previously accredited by the administration and they can only benefit from that condition in up to three different projects, whether parallel or consecutive.
This Bill incorporates, on the one hand, a series of measures that simplify the administrative processes in the creation of “emerging companies”, such as the non-obligation of previously obtaining the tax identification number by the non-resident investors, the creation of the company by digital means and to be able to operate with losses during the first three years, unless insolvency is incurred.
On the other hand, it introduces a series of tax-type fiscal measures, among which we highlight the following:
Modifications in the IS and IRNR
The reduction of the tax rate from 25% to 15% is introduced in the Corporation Tax (IS) and in the Non-Resident Income Tax (IRNR), in the first tax period in which the tax base is positive and during the following three years as long as the status of an emerging company is maintained.
The IS and IRNR tax debt may be deferred in the first two years since the tax base is positive. This deferral will be made without guarantees or default interest, for a period of 12 and 6 months, respectively. The obligation to make installment payments on these two taxes is also eliminated, in the 2 years after the one in which the tax base is positive.
Likewise, the maximum deduction base for investment in newly or recently created companies is raised to 100,000 euros per year. The type of deduction is also extended, going from 30% to 50%.
Improvement of the Beckham Law
In reference to the Beckham Law, a series of modifications have been introduced to broaden its scope and stimulate the attraction of international talent and expatriate nationals. In this sense, the requirement of not having been a tax resident in Spain in the last 10 years is modified, becoming 5 years. As for the period of application of the regime, it continues to be 6 years, but allowing that in the last year it is possible to opt for regimes that favor taxation both in IRPF and in Wealth Tax (IP). Likewise, a new assumption of inpatriates is introduced for those who provide work remotely, through the exclusive use of computer, telematics and telecommunications means and systems, the so-called “digital nomads”. In addition, the non-resident who is appointed administrator of an “emerging company” may benefit from the regime. Finally, as far as the Beckham Law is concerned, it introduces the possibility that the spouse and children under 25 years of age may opt for that regime, provided that certain requirements are met, that no more than one year has elapsed since the displacement of the non-resident and that they do not receive higher remuneration.
Benefits for stock options and multi-activity workers
In relation to remuneration through stock options, the project raises the exempt amount from 12,000 to 50,000 euros per year. In addition, their taxation is delayed at the time they are liquid.
Finally, to favor workers who are in multiple activities, the double contribution to Social Security is eliminated for 3 years.
For any questions or to obtain more information about it, do not hesitate to contact us.