Publicado: 24-02-2025
For international companies looking to expand into Spain, understanding the tax landscape is key to optimizing expenses and maximizing benefits. Spain offers several tax regimes designed to attract foreign investment and promote business growth. Below, we explore five of the most advantageous ones.
This regime benefits companies managing stakes in non-resident entities. ETVEs can obtain an exemption from Corporate Tax on dividends and capital gains derived from foreign holdings, provided they meet certain requirements such as holding at least 5% of the participation for one year or having the necessary material and human resources to manage the activity. Additionally, if the ETVE shareholder is a Spanish resident entity, it enjoys a 95% exemption on earnings, while individual residents are taxed between 19% and 28%. This framework makes Spain an attractive destination for multinational companies seeking tax efficiency in managing their subsidiaries.
Spain offers a 95% exemption on Corporate Tax for dividends and capital gains obtained from subsidiaries. To qualify, the company must hold at least 5% ownership, or in the case of foreign subsidiaries, they must be subject to an equivalent corporate tax of at least 10%. This regime is particularly beneficial for global corporate groups, as it eliminates double taxation and enhances investment profitability.
Companies engaged in Research, Development, and Innovation (R&D&i) can access tax credits of up to 42% in Corporate Tax, which can be carried forward for future investments. Moreover, the "Patent Box" regime provides a 60% exemption on revenues from legally protected intangible assets, such as patents and utility models (excluding trademarks and image rights). This scheme is particularly advantageous for startups and tech companies aiming to optimize their tax burden while fostering innovation.
This regime allows foreign professionals to be taxed in Spain at a flat rate of 24% on worldwide income and other Spanish-sourced earnings up to €600,000 for the first five years, plus the year of acquiring Spanish tax residency. This avoids the progressive scale of the Personal Income Tax (IRPF) and is highly beneficial for executives, entrepreneurs, and remote workers looking to establish themselves in Spain without incurring a high tax burden.
Different Autonomous Communities in Spain offer reductions in Corporate Tax, tariff exemptions, and subsidies. A notable example is the "Mbappé Regime" in the Community of Madrid, which grants a 20% deduction in the regional IRPF bracket for new foreign taxpayers.
These five tax regimes present significant opportunities for international companies looking to set up or expand operations in Spain. With dividend exemptions, innovation incentives, and regional tax benefits, Spain positions itself as a strategic hub for foreign investment.
If you’d like to learn more about how these regimes can benefit you, Gentile Law has a team of expert lawyers ready to advise you.
Lucía Goy Mastromiechele
luciagoy@gentile.law
+34 626 11 84 51
