Initial invoice, good news for investors | Legal

The House of Representatives passed the Promotion Bill last week, at a time when investments in Spain fell between 20% and 25% (according to different indicators) as a result of more careful attention from national and international investors. Government’s Spain centre entrepreneurship, attracting investment, talent and taxation.

The Spanish market has been on investors’ radar for years, and as we’ve seen in the last two years, those of us who are committed to the world of trading have argued for months that it is possible to be optimistic in the face of pessimistic numbers. record figures in fundraising by private equity (including venture capital).

Now it is worth adding to this optimistic position the new financial and structural benefits that can be applied to investors in emerging companies, which breathe new life into the transaction market.

Among the changes introduced by the new law proposal, the reduction of the Corporate Tax rate from the current 25% to 15% (for a maximum of four years, provided that the company status is preserved) stands out. start) and increasing the maximum deduction base for investment in new or start-up companies from 60,000 to 100,000 euros per year (incentive available to both investors and entrepreneurs).

Likewise, the type of deduction increases from 30% to 50% and determines the period for which a tax is considered five years. start (and even up to seven when the company operates in biotech, energy, industrial or other sectors depending on the state of the technology). Also in the definition startthe billing threshold (business volume) has been increased from 5 to 10 million Euros and positive administrative silence is expected from Enisa before a company can qualify for it.

taxation carried interest (for example, the usual success fee for private equity managers) is also modified, raising the exemption to 50% (although it remains taxed as earned income).

Likewise, taxation of wage formulas based on the delivery of shares or subsidiaries (usually Stock options) to its employees beginnings, increasing the exemption amount from 12,000 Euros to 50,000 Euros and applying it also where the delivery in question is the result of exercising the previously granted purchase options. The mechanisms have also been made more flexible so that beginnings may issue stock or treasury shares.

Likewise, in the first three years of the Constitution startThe application of the requirement on balance of equity is excluded in terms of legal grounds for termination, so that the peculiarity of this type of company is embodied in terms of assets and liabilities at the initial stage until the final consolidation of its model. ray.

Regarding the tax regime for workers relocating to Spanish territory, commonly known as the “Beckham Law”, access conditions were relaxed, reducing the period of tax residency outside Spanish territory from ten to five years prior to transfer. It also gives access to this regime to employees who travel to Spanish territory (so-called “digital nomads”) to work remotely, and access to managers regardless of their percentage of participation in social capital (previously limited to 25%). Moreover, the application of the regime in question is extended to include the children of the displaced worker and their spouse or parents of their children, if certain conditions that have not yet been disclosed are met.

Finally, the bill gives the Tax Office the capacity to monitor and verify that the conditions for taking advantage of these tax incentives are met and maintained, and raises the penalty threshold for reversing such benefits if a partner is convicted. will only apply if the convicted person owns at least 5% of the company’s capital. start).

The bill has been welcomed by numerous investors, who for no reason think it will contribute to making the Spanish business ecosystem more competitive. In any case, common sense invites us to await the final text of the law after its proceedings in the Cortes Generales, and its implementation after the rules of the game have been defined, and the response of the Administration. The legal certainty longed for in the private sector deserves it.

Jorge del Castillo and Jose M. Llanos AlperiTax and Corporate M&A partners of Cases & Lacambra, respectively