Wednesday 1 May 2019


As of January 1st 2018 the maximum annual deduction base is increased
from 50.000 to 60.000€ and the percentage of tax deduction from 20% to 30%.
(article 68.1 and additional provision No. 38ª.2 of Spanish Income Tax Law)


The deduction for investment in recent incorporated companies was first regulated by the Law No. 14/2013, of September 27th, in order to favour the investment of capital in the creation of companies.

This deduction is exclusively applied to the part of the total tax liability which corresponds to the Spanish central state.

The maximum annual deduction base (formed by the value of the shares subscripted) is 60.000€.

In case that the taxpayer had sold company shares and obtained an exemption from taxation by means of reinvestment of the obtained amount (article 38.2 of the Spanish Income Tax Law), the deductible base will only consist on the part EXCEEDING THE REINVESTMENT.

The amount of the shares acquired with the balance of a company saving account will not form part of the deduction base (transitory provision 28ª of the Spanish Income Tax Law). Note that company saving accounts were suppressed on January 1st 2015.

The deduction percentage is 30%.

Requirements for the application of the deduction

·         Requirements applicable to the entity (article 68.1.2 of the Spanish Income Tax Law)

o   Having the legal form of Corporate Company, a Limited Company, a Laboral Corporate Company or a Laboral Limited Company (Corporate Tax Law, Royal Decree Law No. 1/2010, of 2nd July, and Laboral Corporate Law No. 4/1997, of 24th March)

o   Undertaking an economic activity. This excludes fixed and movable assets referred in article 4.8.dos.a) of Law No. 19/1991, of 6th June about Property Tax.

o   Turnover not exceeding 400.000 €.


·         Requirements of shares (article 68.1.3 of the Spanish Income Tax Law)

o   Shares to be deducted must have been acquired at the time of the incorporation of the company or at the time of a capital increased taking place in the 3 years following the constitution.

o   Shares must be held by the taxpayer, at least, for 3 years and at the most for 12.

o   Direct or indirect participation of the taxpayer, together with the one owned at the same company by the spouse of the taxpayer or any relative of the taxpayer in 2nd grade (in direct or collateral line) may not exceed 40% of the share capital.

o   The activity of the entity may not be the same previously exercised by the taxpayer.


·         Formal requirements (article 68.1.5 of Spanish Income Tax Law)

o   Certification with the identification of shareholders, percentage and period.

e.g.: Let’s suppose that in January 2018 a taxpayer invests 70.000€ in a recently incorporated company which fulfils all deduction requirements. The máximum amount to be deducted would be the following:
·         Deduction in the total tax liability which corresponds to the Central State
o   Maximum base: 60.000€
o   Deductions amount: 60.000 x 30% = 18.000€
·         Deduction in the total tax liability which corresponds to the Regional Government
o   Deductible investment: 70.000 – 60.000 = 10.000€
o   Amount of the deduction: 10.000 x 20% = 2.000€

  For further information:




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