Spain, the Best Location for your R&D Activities (I) – PBS

Are you performing R&D activities? If the answer is yes or maybe, you should read our post to discover how R&D in Spain with the advantageous Spanish Corporate income tax regulations can benefit your company.

We inform you that Spain has maintained most of the current tax measures to reinforce R&D activities, by granting substantial tax relief in fiscal years 2015 and onwards.

✔The most commonly applied by Spanish taxpayers relates to the R&D tax credit, that implies a direct reduction of the final Corporate income tax.

A 25% of the R&D expenses can benefit from this tax credit. This percentage can increase to 42% for expenses exceeding the average of those incurred in the two preceding years.

✔Besides, the following additional items can reduce your company’s final Corporate income tax, when they are exclusively dedicated to the R&D activities:

(i)               17% of research personnel expenses; and,

(ii)             8% of investments in tangible (excluding immovable properties) and intangible assets.

✔ Although they are generally subject to a limit on the tax quote, of 25% or 50% based on the proportion of the tax credit in relation to the tax quote, such limit can be avoided by discounting 20% of the tax credit. Taxpayers can also apply for their refunds, when R&D tax credits cannot be used because of insufficient tax quote.

Measures to take into account by Spanish tax payers, given the substantial tax advantages that they offer.