Incentive programmes
The main incentive programmes available in Catalonia provide companies with grants and funding for R&D and innovation, training, hiring, energy and environment and fixed assets investments. Apart from these programmes, there are other incentives for export and international activities. More details in the areas of raising environmental awareness and energy efficiency, are available at Catalan Energy Institute (Institut Català d'Energia, ICAEN) and at the Environment Department (Departament de Medi Ambient i Habitatge).
Calls 2010:
Low tax regime for holding companies
Spain has one of the most favourable tax regimes for holding companies (ETVE) in the world. This regime is basically intended for those international groups which wish to have a centre from which to manage their holdings in several countries. The only requirements are the incorporation of a company in Spain and the provision of securities from the companies in which the ETVE has a holding (provided they represent a minimum holding of 5% or less but with a cost of more than €6m, and provided the companies in which it has a holding conduct business). Thanks to this privileged tax regime, an ETVE with the above characteristics does not have to pay tax on dividends received from non-resident companies in which it has a holding and its members do not have to pay on the sums distributed by the ETVE. Main advantages of the system include benefits for the employees and for companies.
For employees:
- Low employees' social security contribution rates (6.4%) and low personal income tax rates (24%-43%) result in higher disposable income.
- Newly arrived foreigners (who have not lived in Spain for the previous 10 years) can choose between the normal resident tax scheme (24-43%) or the non-resident tax scheme (flat rate of 24%) for a maximum of 6 years. Through the non-resident tax scheme, income earned in countries other than Spain will not be subject to personal income tax.
For companies:
- Exemption from corporate income tax on dividends and capital gains earned from foreign subsidiaries.
- Withholding tax exemption on dividends from foreign subsidiaries distributed out of Spain. No taxation on capital gains arising from the transfer of Spanish shares.
- Withholding tax exemption on dividends within the EU.
- Tax rebates for the depreciation of the financial goodwill (5% annually).
- Tax rebates for exporting companies (9% of invested amount in 2008 and 6% in 2009).
- Additional rebates for: professional training (5%-10%), technology improvements (5%-10%), R&D activities (30%-50%), among others.
- Effective tax rate of a Spanish company after tax rebates could be as low as 0%.
- Spain has a large number of double taxation treaties, especially with Latin American countries which makes it an ideal jurisdiction for investments into Latin America.
Tax allowances for RDI
Tax allowances regime for research, development and technological innovation are among the best in the world. The Spanish tax framework for RDI is acknowledged by the European Union of Industrial and Employer's Confederation (UNICE) as being the best among OECD countries. These allowances may be applied also by businesses carrying out R&D tasks for foreign companies which are not permanently established in Spain. In such a case, the Spanish business can include as R&D expenditure any expenditure associated with R&D projects commissioned by foreign companies. Also, subsidiaries of multinationals established in Spain which carry out R&D activities from Spain for group entities abroad may apply for tax allowances for RDI activities in relation to expenditure made abroad for up to 25% of the total amount invested in the project, provided the main part is carried out in Spain.
Tax allowances for research and developement activities, 2008:
- Expenditure relating to R&D projects: 25% (exceptionally, up to 42%)
- Personnel expenditure on qualified researchers dedicated solely to R+D activities: an extra 17%
- Expenditure relating to research and development projects subcontracted with universities, public research centres or technology and innovation centres: an extra 17%
- Investments in tangible and intangible fixed assets (excluding real property and land) intended solely for R&D activities: 8%
Tax allowances for technological innovation activities, 2008:
- Expenditure relating to technological innovation projects subcontracted with universities, public research centres or technology and innovation centres 12%
- Expenditure relating to industrial design and production process engineering: 8%
- Expenditure relating to the acquisition of advanced technology in the form of patents, licences, know-how and designs (with a limit of 1m €): 8%
- Expenditure relating to obtaining a certificate of compliance with ISO 9000, GMP or other similar quality regulations: 8%
