Biscay, a territory with attractive fiscal advantages and alignment with the SDGs
Thanks to its independent regulatory powers on taxation, Biscay has a number of tax measures designed to strengthen its economic ecosystem and channel it towards support for innovation, entrepreneurship and alternative financing.
Learn what tax breaks Biscay can offer
With the exception of customs duties, the Biscay Treasury Department collects and manages all taxes levied in the area, just as any state would. It has the same level of fiscal autonomy.
Biscay is especially attractive in terms of taxation for start-ups, intensive R&D&i units at corporations, fund managers, strategic investment managers and highly skilled individuals (talent) because it is firmly oriented towards the production economy and provides smooth, close-up service via the Provincial Council of Biscay.
The main tax advantages offered by Biscay in each area can be summed up as follows:
Start-ups, intensive R&D&i units at corporations and strategic investments
- Agreements to avoid double taxation.
- Tax policies aimed at supporting R&D&i operations. For example, firms with high rates of R&D&i are permitted apply reductions on the full amount of corporation tax payable, which can bring the effective rate to 3%.
- Negative tax bases can be offset up to 50% against tax losses (70% for micro-enterprises and small businesses, business ecosystem ), with an offsetting period of 30 years.
- Tax bases can be reduced to encourage capitalisation by means of reserves, equalisation reserves, invoicing from the use of in-house intellectual property and income from the assignment of intellectual or industrial property (paper box), thus fostering open innovation.
- Deductions for firms that finance R&D&i or technological innovation of up to 120% of yield (Article 64bis).
- the UN's 2030 agenda.
- Further deductions including deductions via non-accounting adjustments which make Biscay a highly attractive territory for organisations on the lookout for competitive tax breaks.
- Reductions in the taxable base for personal income tax on earnings arising from shares, holdings and other rights in alternative investment entities.
- Extraordinary deductions for up to 20% on investments in micro-enterprises and SMEs.
- Tax policies aligned with the sustainable development goals (SDGs) set in the UN's 2030 agenda.
Talent: Highly-skilled impatriates
Tax breaks and incentives for persons seconded to the area who become residents (impatriates). These are usually highly-skilled workers. A special tax regime applies for their first six years as from arrival, and they can also enjoy the tax incentives applicable to all residents of Biscay. For example, 35% of their salaries is not taxable under personal income tax. These tax breaks make it easier for organisations to incorporate talent.
Investment entities and non-resident specialists
International agreements to avoid double taxation.
Specialists with resident investment profiles
- Tax exemptions on sales of shareholdings and on dividends distributed.
- A reduction of 60% on the taxable base if a special reserve is set up for start-ups, new companies and spin-offs.
- Exemptions on participative loans to start-ups/spin-offs.
- Deductions of the amount of holdings in micro-enterprises and SMEs.
- The possibility of full exemption on personal income tax on sales of shares when exiting a company after maintaining investment for a number of years.
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