Tax opportunities for Startups: how to take advantage of the incentives of the Startups Law

Law 28/2022, promoting the ecosystem of emerging companies, known as the Startups Law, has marked a before and after in Spain, creating more favorable conditions for innovative entrepreneurship.

Main tax benefits of the Startups Law

The Law includes specific measures that facilitate investment attraction, talent retention, and improvement of liquidity for emerging companies. Among the most relevant are:

• Reduced rate of 15% in Corporate Tax during the first four years with positive taxable base, as long as the qualification of emerging company is maintained.

• Deferral of Corporate Tax payment in the first two profitable years, without interests or guarantees, in addition to the exemption of installment payments in the following year.

• 50% deduction in Personal Income Tax for investors, with a maximum base of €100,000, encouraging the participation of business angels and venture capital.

• Improvement of the stock options regime, with exemption of up to €50,000 annually and deferral of the excess until the sale of shares, aligning compensation with the company's success.

• R& D& I deductions, allowing to reduce the Corporate Tax quota based on expenses in innovative projects, especially relevant for technological startups.

Additional advantages: a more favorable environment for entrepreneurship

Beyond the tax benefits, the Startups Law also reduces administrative hurdles and promotes agility in procedures:

• Simplified establishment of companies with model bylaws, reduced fees, and lower notarial and registration costs.

• Digital one-stop shop, centralizing procedures and facilitating the official recognition as an emerging company.

At Valero Tax Legal, we advise startups and investors on the practical application of these incentives, ensuring compliance with requirements and maximizing the opportunities provided by this regulation.