Tax benefits for startups
Companies that qualify as startups under the law may benefit from the following:
- A reduced 15% corporate income tax rate for up to four years.
- Deferral of tax debts without guarantees and exemption from advance corporate income tax payments during the first two tax periods in which the startup reports a positive taxable base.
Investment deductions for startups
Law 28/2022 improves the deduction for investment in newly or recently created companies.
- Deduction for investment in startups: the deduction rate increases from 30% to 50%, the maximum deduction base rises from €60,000 to €100,000, and the period for subscribing shares, counted from the company’s incorporation, increases from three to five years generally and up to seven years for qualifying startups.
- Founders of startups may apply the deduction regardless of their percentage ownership in the company.
Taxpayers may therefore deduct 50% of the invested amounts, with a maximum annual base of €100,000. Certain conditions apply, including a minimum holding period of three years.
