On 1 December 2022, the Spanish Congress of Deputies has approved the Law for the Promotion of the Emerging Companies Ecosystem, better known as the Startups Law. The law facilitates some tax measures for the startups business.
Under this, the tax rate for corporate income tax and foreign income tax is reduced from the general tax rate of 25% to 15% for the first four financial years after the initial recognition of taxable income. Corporation tax and non-resident income tax payments for the first two years in which taxable income is recorded may be deferred for periods of 12 and 6 months respectively, with no deposit or arrears interest required. The obligation to deduct corporation tax and foreign income tax does not apply for the first 2 years after the taxable income is recorded for the first time.
