Tax Benefits for Foreigners in Spain by Entre Trámites
Home News Tax Benefits for Foreigners in Spain by Entre Trámites

Tax Benefits for Foreigners in Spain by Entre Trámites

JUNE 26, 2024 BHH Members Initiatives

Spain has been working to improve its business environment to make the country more attractive to foreigners, states BHH provider Entre Trámites. Through various policies and tax benefits, the government aims to encourage the creation of new companies, attract foreign talent, and stimulate the economy. Among the most notable measures are the general tax advantages for foreigners and The Beckham Law, a specific regulation that offers tax benefits to foreign workers, including entrepreneurs.

General Tax Benefits For Foreigners

  1. Deductions for Investment in New Companies: Investors who invest in new companies can benefit from tax deductions. Generally, they can deduct 30% of the investment made from their personal income tax, with a limit of 60,000 euros per year. This measure aims to incentivize investment in entrepreneurial projects and facilitate access to financing.
  2. Reduction of the Taxable Base for New Companies: New companies can apply a 20% reduction on the positive taxable base for the first tax period in which the taxable base is positive and the following one. This reduction is limited to companies that meet certain requirements, such as being newly created and not having previously conducted economic activity.
  3. Flat Rate for Self-Employed: New self-employed individuals can benefit from a flat rate for social security contributions. During the first 12 months, the contribution is 60 euros per month. Subsequently, there are a series of reductions and bonuses that allow for a gradual transition to the full contribution amount. This makes it easier for entrepreneurs to start their activity without the full burden of social security contributions.
  4. Deductions for Innovation and Technological Development: Companies that invest in research and development (R&D) can access significant tax deductions. Deductions can be as high as 42% of R&D expenses, with the aim of promoting innovation and technological development within the Spanish business fabric.

The Beckham Law: An Incentive for Foreign Talent

The Beckham Law, officially known as the Special Tax Regime for Workers Relocated to Spanish Territory, was initially designed to attract footballers and other elite athletes to Spain. However, it can also be used by entrepreneurs and other qualified professionals who move to the country.

  1. Reduced Income Tax: Under this regime, relocated workers can choose to be taxed as non-residents for six years, paying a flat rate of 24% on the first 600,000 euros of income. This is significantly lower than the rates applicable to residents, which can be as high as 47%. This advantage makes Spain an attractive destination for foreign entrepreneurs looking to establish and grow their projects in the country.
  2. Exclusion of Extraterritorial Income: Income earned outside of Spain is not subject to taxation under the Beckham Law. This allows entrepreneurs with international businesses to optimize their tax burden by only taxing income generated within Spanish territory. This exemption is especially attractive for digital entrepreneurs and those with global operations.
  3. Administrative Ease: The Beckham Law regime simplifies the administrative burden for beneficiaries, reducing the complexity and time required to comply with tax obligations. This includes a simpler process for tax declarations and less paperwork compared to the general personal income tax regime.

Spain offers a favorable tax environment for entrepreneurs, both local and foreign, through various deductions, reductions, and special regimes. The Beckham Law, in particular, provides a significant advantage for attracting foreign talent and capital, positioning Spain as an attractive destination for innovation and entrepreneurship.

Find the best option that suits you when taking advantage of these policies. At Entre Trámites, you will find specialists who will help you find the best path for your life as an entrepreneur in Spain.

Don’t wait any longer and discover what they can offer HERE!

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