Taxation and Investment in Spain

Taxation and Investment in Spain


Investing in Spain can be a lifetime opportunity and a very beneficial choice for investors and entrepreneurs across the world, after the economic crisis, the Spanish government has been consistently working towards the goal of promoting the investment, the employment, competitiveness and the growth of the economy, through developing a complete extensive system of investment aids and incentives that are designed for the purpose of boosting many specific sectors of the economy. 

The Spanish government is currently providing financial and taxation benefits for priority industries that can be of special impact on the economy and have potential growth opportunities, such as mining, technological development, research and development sectors, an example of these aids and benefits can be the interest reliefs on loans and non-refundable subsidies for companies operating under these specific sectors. 

The government has introduced several official programs and long-term plans to support the industrial development and innovation projects, such as the 2013-2020 Spanish Strategy for Science and Technology for Innovation, which is aimed towards aligning Spanish policies with the research and development and innovation objectives pursued by the European Union, and the 2017-2020 State plan for Scientific and Technical Research and for Innovation, which is aimed towards the development of the country’s scientific and technological leadership and innovative capacities for the purpose of creating quality employment, productivity, business competitiveness, improving and developing the public services which will all lead to the development and welfare of citizens. 

Spain provides many taxation incentives which are based on the type of business activity and the place where the business entity will operate in, such as the tax credit which amounts to 50% for income that was obtained in Ceuta and Melilla cities, and the 25% tax credit on expenses incurred from Research and Development activities, and a 17% tax credit on employees specifically carrying out these activities, in addition to tax credits that amounts to 25% on film production and live performing arts and musical shows. 

The Spanish government also provides training and employment incentives, where employees training and their leaves of absence can be financed partially or as a whole by the government, also investors can benefit from the taxation treaties which the Spanish government has signed with more than 90 countries around the world, where certain types of income such as dividends and capital gains are exempt or can be subject to low taxation rates.