Tax measures for small businesses, family savings and companies going abroad

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1. Expands the special tax regime for small companies under the Corporate Income Taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. to those with revenue below 3 million euros, and improves the depreciation rules for reinvested profits.
2. Creates a 10 percent tax credit under the Corporate Income Tax for small companies that invest in internet, e-commerce and information technologies, and allows deducting the cost of training employees in the use of those technologies.
3. Raises the reduction limits for contributions to pension plans and allows one spouse to reduce, in their own tax base, contributions to the other spouse's pension plan, up to 300,000 pesetas a year, if that spouse does not work outside the home or earns little.
4. Shortens from two years to one the holding period for capital gains and losses to be taxed in the special part of the personal income tax base, and lowers the tax rate on these earnings to 18 percent in total (15.30 percent state and 2.70 percent regional).
5. Sets an exemption for dividends and income from foreign subsidiaries to avoid international double taxation, with requirements and anti-abuse measures, and creates a deduction for investing in non-resident companies giving majority voting rights.
6. Exempts the taxpayer's main home from the Wealth Tax up to 25,000,000 pesetas and creates two loan programs from the Ministry of Science and Technology to support technology-based companies.

Who it affects

• Small and medium-sized companies: They pay less tax and get credits for investing in technology and reinvesting profits.
• People contributing to pension plans: They can reduce more in their personal income tax, and spouses with no or low income are now covered.
• People selling investments or shares: Their gains are taxed sooner in the special part of the tax base and at a lower rate, 18 percent.
• Companies operating abroad: Foreign-source income avoids double taxation and there are deductions for setting up abroad.
• Owners of their main home: They no longer pay Wealth Tax on it up to a value of 150,253.03 euros.

Words worth knowing

Base imponible (tax base)

The amount of money on which the tax is calculated.

Deducción en la cuota (tax credit)

An amount subtracted directly from the tax due.

Doble imposición internacional (international double taxation)

When the same income is taxed in two countries at once.

Empresa de reducida dimensión (small-sized company regime)

A regime with tax advantages for small companies that meet certain revenue limits.

Retención (withholding)

A portion of a payment that the payer sends to the tax agency in advance on behalf of the person receiving it.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries