Business · Economy · 2 hrs ago
Spain’s Startup Law generated only €4 million in tax deductions
Spain’s Startup Law delivered just €4 million in corporate tax deductions in 2023 and 2024, according to a government-commissioned review.
The law was passed in 2022 to support innovative companies, including startups.
That result fell far short of the government’s estimate of more than €2 billion in tax revenue reductions.
A central measure cut the corporate tax rate from 25% to 15% for four years, but many startups do not make profits and therefore owe no corporate tax.
Only 365 certified startups claimed the deduction, while the number of companies certified by Enisa was about half the government’s original forecast.
The review also found that fewer companies offered employee stock options, falling from 194 in 2023 to 144 in 2024.
The review calls for the incentives to be redesigned, and the government had announced plans for a separate Scaleup Law to extend support to more innovative businesses.
Spain’s Startup Law generated just €4 million in corporate tax deductions in 2023 and 2024, according to a government-commissioned report.
The government had estimated the law would have an impact of more than €2 billion on tax revenue.
The law’s main tax measure cut the corporate tax rate for eligible startups from 25% to 15% for four years.
Only 365 companies checked the box to claim the deduction on their corporate tax returns.
The report also found that fewer companies used the law’s revised tax treatment for employee stock options.
- Who
- Spain’s startups and companies eligible under the Startup Law.
- What
- The law generated €4 million in corporate tax deductions in 2023 and 2024, far below the government’s estimate of more than €2 billion.
- When
- The report covers 2023 and 2024. The law was approved in 2022.
- Where
- Spain.
- Why
- Most intended beneficiary companies do not make profits and therefore do not pay corporate tax.
This story does not have two clearly opposing sides.
Spain approved Law 28/2022, known as the Startup Law.
Companies received a total of €4 million in corporate tax deductions under the law.
The number of companies granting employee stock options fell from 194 to 144.
- Tax deductions
- €4 million in 2023 and 2024
- Government estimate
- More than €2 billion in tax revenue impact
- Corporate tax rate
- Cut from 25% to 15% for four years
- Companies claiming deduction
- 365
- Certified startups
- Close to half of the 5,000 companies forecast
- Employee stock options
- 194 companies in 2023; 144 in 2024
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What people are saying
where low capacity to generate profits limits access to some incentives