Tax Breaks Announced in Spain

January 16, 2014 Taxation in Spain

Tax in SpainMADRID – Spain will use tax breaks for businesses and investors to boost national economic growth.

The government of Spain is actively looking at new measures to revive growth of the national economy, and will soon offer tax breaks for small businesses, provide tax concession for investors, and will cut corporate income tax, according to a new statement issued by the Ministry of Finance on January 14th.

Businesses in Spain with turnovers below EUR 10 million per annum will now be eligible for a 10 percent discount on their income tax obligations, a move which will reduce overall tax payments by as much as 600 million per year.

From the start of this year angel investors will also be given a 20 percent discount on taxes on income taxes owing for the profits derived from investments of at least EUR 50 000 made into a new businesses.

Also, the Ministry announced that capital gains tax will no longer apply on profit derived from an investment, if it is reinvested straight into another business project.

In a interview given on the same day to the national media, the Minister of Economy Luis de Guindos indicated that the government is currently looking into cutting the corporate tax rate, and improving the current tax regulations to create a more business-friendly environment, while closing loopholes which are siphoning away national tax revenues.

The economy of Spain has recently shown the first signs of recovery after several years of recession, having reached GDP growth of 0.1 percent over the 3 months to December 2013, the first positive result since the second quarter of 2011.

Photo by: Gilad Rom