What is a tax deduction?A tax deduction is a reduction in the tax burden that applies to the full amount of a tax based on parameters set out in current legislation. Today in Intelectium we announce the most notable tax deductions for companies.Corporate tax deductionsBelow, we list the most relevant tax deductions:Deduction for Research and Development and Technological Innovation activities
Spain is one of the countries that most favors deductions in companies that invest in R+D+i projects. The company can deduct up to 42% of R&D expenses.
They can be applied by any taxpayer of Corporation Tax who carries out innovative activities, affecting neither their size, nor their turnover, nor their sector of activity. The main objective of Tax Deductions for R+D+i is to encourage the efforts made by companies in the development of innovative activities, allowing the full share of Corporation Tax to be reduced by up to 100%, thus increasing their competitiveness and promoting the continuous improvement of their products and production processes. Within this deduction we can distinguish two types of activities: research and development (R&D) and technological innovation (i). All of these activities are referred to as R+D+i activities, and are defined in article 35 of the LIS.
The potential of the Tax Deduction is up to 42% for expenses on R&D projects, and 12% for projects qualified as Technological Innovation.
Deduction for job creationCompanies can be deducted up to 3,000 euros for hiring a person, who is under thirty years of age and for an indefinite period.This deduction will be conditioned on the maintenance of this employment relationship for at least 3 years from the date of its beginning. In the case of part-time contracts, the deduction will be applied in proportion to the working day agreed in the contract. Companies with fewer than 50 workers that hire the unemployed indefinitely may deduct 50% of the lower of the following amounts from the full quota:
- Amount of unemployment benefit that the worker had pending receipt at the time of hiring.
- Amount corresponding to 12 monthly installments of the unemployment benefit that you have recognized.
In addition, this deduction will be conditioned on the maintenance of this employment relationship for at least 3 years from the date of its beginning.Employment creation deduction for workers with disabilitiesBusinesses that hire employees with disabilities equal to or greater than 65% may deduct up to 12,000 euros per employee per year. Companies that hire employees with disabilities equal to or greater than 33% and less than 65% may deduct up to 9,000 euros per employee per year. In short, the objective of tax deductions is to create benefits for Spanish society and to encourage new technologies and new business models. For more information, you can contact us at Form.
