Personal tax, the impatriate regime and Social Security
Ley 28/2022, first to fourth final provisions: the 50,000-euro exemption for startup shares given to staff and the deferral of tax on the rest, the investor deduction raised to 50 per cent on up to 100,000 euros, the rewritten impatriate regime in article 93 of the Personal Income Tax Act, carried interest, and a three-year Social Security bonus for founders who also hold a job.
What this part of the Act did
The Act’s own articles give the company its tax rate and deferral. The benefits for the people around it — employees paid in shares, investors, founders who move to Spain — are delivered here, by rewriting provisions of the Personal Income Tax Act with effect from 1 January 2023. The most consequential is the fifth amendment in the third final provision, which replaced article 93 of that Act: the special regime for people who become Spanish tax resident on moving to Spain, widely known as the Beckham law.
Final provisions
First final provision. Constitutional basis
This Act is issued under the constitutional heads of power cited below:
a) The preliminary title, except articles 3.2 and 6, and title IV are issued under article 149.1.13.ª of the Constitution, which grants the State power over the bases and coordination of the general planning of economic activity.
b) Chapters I and II of title I and the second and third final provisions are issued under article 149.1.14.ª of the Constitution, which grants the State exclusive power over General Finance and State Debt.
c) Article 5 and title II, except article 12 as regards notarial and registry fees, are issued under article 149.1.6.ª of the Constitution, which grants the State exclusive power over commercial legislation.
d) Articles 3.2, 3.3 and 12, as regards notarial and registry fees, and the first additional provision, as regards the General Council of Notaries and the Spanish Association of Registrars, are issued under article 149.1.8.ª of the Constitution, which grants the State exclusive power over the organisation of registries and public instruments.
e) Title III, except paragraph 1 of article 14, is issued under article 149.1.18.ª of the Constitution, which grants the State power to issue basic legislation on administrative contracts and concessions.
f) The first additional provision is issued under articles 149.1.6.ª, 8.ª and 18.ª of the Constitution, which grant the State power to issue the bases of commercial legislation and of the organisation of registries and public instruments, and the bases of the legal regime of the Public Administrations.
g) Title V is issued in accordance with articles 149.1.15.ª and 149.1.30.ª of the Constitution, which grant the State power over the promotion and general coordination of scientific and technical research, and to issue basic rules for the development of article 27 of the Constitution, in order to guarantee that the public authorities fulfil their obligations in this field.
h) Paragraph 1 of article 14, titles VI and VII and the first, second and third additional provisions shall apply only within the General State Administration and its institutional public sector.
i) Article 10 is issued under articles 149.1.6.ª, 11.ª and 13.ª of the Constitution, which grant the State exclusive power over commercial legislation, the bases of the organisation of credit, banking and insurance, and the establishment of the bases and coordination of the general planning of economic activity.
j) The fifth additional provision is issued under article 149.1.30.ª of the Constitution, which grants the State exclusive power to issue basic rules for the development of article 27 of the Constitution.
The remaining provisions shall apply only within the General State Administration and its institutional public sector.
Second final provision. Amendment of the consolidated text of the Non-Resident Income Tax Act, approved by Royal Legislative Decree 5/2004 of 5 March
The consolidated text of the Non-Resident Income Tax Act, approved by Royal Legislative Decree 5/2004 of 5 March, is amended as follows:
Letter a) of article 14.1 is worded as follows:
«a) The income referred to in article 7, and the income from employment in kind referred to in paragraph 3 of article 42 of Law 35/2006 of 28 November on Personal Income Tax and partially amending the laws on Corporate Income Tax, Non-Resident Income Tax and Wealth Tax, received by natural persons, as well as the benefits by reason of need recognised under Royal Decree 8/2008 of 11 January regulating the benefit by reason of need for Spaniards resident abroad and returnees.»
Third final provision. Amendment of Law 35/2006 of 28 November on Personal Income Tax and partially amending the laws on Corporate Income Tax, Non-Resident Income Tax and Wealth Tax
With effect from 1 January 2023, the following amendments are made to Law 35/2006 of 28 November on Personal Income Tax and partially amending the laws on Corporate Income Tax, Non-Resident Income Tax and Wealth Tax, which is worded as follows:
One. A letter m) is added to paragraph 2 of article 14, worded as follows:
«m) Income from employment in kind arising from the delivery of shares or quotas in a startup referred to in Law 28/2022 of 21 December on the promotion of the startup ecosystem which, meeting the requirements established in letter f) of paragraph 3 of article 42 of this Act, is not exempt because it exceeds the amount provided for in that article, shall be allocated to the tax period in which either of the following circumstances occurs:
– The company’s capital is admitted to trading on a stock exchange or on any multilateral trading system, Spanish or foreign.
– The share or quota concerned leaves the taxpayer’s assets.
Nevertheless, once a period of ten years has elapsed from the delivery of the shares or quotas without either of the circumstances indicated above having occurred, the taxpayer must allocate the income from employment referred to in this letter corresponding to those shares or quotas to the tax period in which that ten-year period has been completed.»
Two. Letter f) of article 42.3 is worded as follows:
«f) On the terms established by regulation, the delivery to active employees, free of charge or for less than the normal market price, of shares or quotas in the company itself or in other companies of the group, in the part which does not exceed, for all those delivered to each employee, 12,000 euros a year, provided that the offer is made on the same conditions for all the employees of the company, group or subgroups of companies.
The exemption provided for in the preceding paragraph shall be 50,000 euros a year in the case of the delivery of shares or quotas granted to the employees of a startup referred to in Law 28/2022 of 21 December on the promotion of the startup ecosystem. In that case, the offer need not be made on the conditions indicated in the preceding paragraph, but must be made within the company’s general remuneration policy and contribute to the participation of the employees in the company. Where the delivery of shares or quotas referred to in this paragraph derives from the exercise of call options over shares or quotas previously granted to the employees by the startup, the requirements for qualifying as a startup must be met at the time the option is granted.»
Three. A new letter g) is added to number 1.º of paragraph 1 of article 43, worded as follows:
«g) In the case of the delivery of shares or quotas granted to the employees of a startup referred to in the second paragraph of letter f) of paragraph 3 of article 42 of this Act, at the value of the shares or quotas subscribed by an independent third party in the last capital increase carried out in the year before that in which the shares or quotas are delivered. If no such increase has taken place, they shall be valued at the market value that the shares or quotas had at the time of delivery to the employee.»
Four. Article 68.1 is worded as follows:
«1. Deduction for investment in new or recently created companies.
1.º Taxpayers may deduct 50 per cent of the amounts paid in the period concerned for the subscription of shares or quotas in new or recently created companies, where the provisions of numbers 2.º and 3.º of this paragraph are met, and may, in addition to their temporary contribution to the capital, contribute their business or professional knowledge appropriate to the development of the entity in which they invest, on the terms established by the investment agreement between the taxpayer and the entity.
The maximum deduction base shall be 100,000 euros a year and shall be formed by the acquisition value of the shares or quotas subscribed.
Amounts paid for the subscription of shares or quotas shall not form part of the deduction base where, in respect of those amounts, the taxpayer applies a deduction established by the Autonomous Community in exercise of the powers provided for in Law 22/2009 of 18 December regulating the system for financing the common-regime Autonomous Communities and Cities with Statutes of Autonomy and amending certain tax rules.
2.º The entity whose shares or quotas are acquired must meet the following requirements:
a) It must take the form of a Public Limited Company, Limited Liability Company, Worker-Owned Public Limited Company or Worker-Owned Limited Liability Company, on the terms provided for in the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010 of 2 July, and in Law 44/2015 of 14 October on Worker-Owned and Participated Companies, and must not be admitted to trading on any organised market, whether a regulated market or a multilateral trading system.
This requirement must be met throughout all the years in which the share or quota is held.
b) It must carry on an economic activity with the human and material resources needed to carry it out. In particular, its activity may not be the management of movable or immovable property referred to in article 4.8.dos.a) of Law 19/1991 of 6 June on Wealth Tax, in any of the entity’s tax periods ended before the transfer of the holding.
c) The amount of the entity’s equity may not exceed 400,000 euros at the start of its tax period in which the taxpayer acquires the shares or quotas.
Where the entity forms part of a group of companies within the meaning of article 42 of the Commercial Code, regardless of residence and of the obligation to draw up consolidated annual accounts, the amount of equity shall refer to all the entities belonging to that group.
3.º For the purposes of applying the provisions of number 1.º above, the following conditions must be met:
a) The shares or quotas in the entity must be acquired by the taxpayer either at its incorporation or through a capital increase carried out, as a general rule, within the five years following that incorporation, or within the seven years following that incorporation in the case of the startups referred to in paragraph 1 of article 3 of Law 28/2022 of 21 December on the promotion of the startup ecosystem, and must remain in the taxpayer’s assets for a period of more than three years and less than twelve years.
b) The direct or indirect holding of the taxpayer, together with that held in the same entity by their spouse or by any person related to the taxpayer by kinship, in the direct or collateral line, by consanguinity or affinity, up to and including the second degree, may not, on any day of the calendar years in which the holding is held, exceed 40 per cent of the entity’s share capital or voting rights. The provisions of this letter shall not apply to the founding members of a startup referred to in Law 28/2022 of 21 December on the promotion of the startup ecosystem, understood as those who appear in its public deed of incorporation.
c) The shares or quotas must not be in an entity through which the same activity is carried on as was previously carried on under another ownership.
4.º Where the taxpayer transfers shares or quotas and opts to apply the exemption provided for in paragraph 2 of article 38 of this Act, only the part of the reinvestment exceeding the total amount obtained on the transfer of those shares or quotas shall form part of the deduction base corresponding to the new shares or quotas subscribed. In no case may a deduction be applied for the new shares or quotas while the amounts invested do not exceed that amount.
5.º In order to apply the deduction, a certificate must be obtained from the entity whose shares or quotas have been acquired, stating that the requirements set out in number 2.º above were met in the tax period in which they were acquired.»
Five. Article 93 is worded as follows:
«Article 93. Special tax regime applicable to workers, professionals, entrepreneurs and investors moving to Spanish territory.
1. Natural persons who acquire tax residence in Spain as a result of moving to Spanish territory may opt to be taxed under Non-Resident Income Tax, with the special rules provided for in paragraph 2 of this article, while retaining the status of Personal Income Tax taxpayers, during the tax period in which the change of residence takes place and during the following five tax periods, where, on the terms established by regulation, the following conditions are met:
a) That they have not been resident in Spain during the five tax periods preceding that in which they move to Spanish territory.
b) That the move to Spanish territory takes place, either in the first year of application of the regime or in the previous year, as a result of any of the following circumstances:
1.º As a result of an employment contract, with the exception of the special employment relationship of professional sportspeople regulated by Royal Decree 1006/1985 of 26 June regulating the special employment relationship of professional sportspeople.
This condition shall be deemed met where an employment relationship, whether ordinary or special other than that indicated above, or a statutory relationship, is entered into with an employer in Spain. This condition shall likewise be deemed met where the move is ordered by the employer and there is a letter of assignment from the employer, or where, without being ordered by the employer, the work is performed remotely through the exclusive use of computer, telematic and telecommunications means and systems. In particular, this circumstance shall be deemed met in the case of employees holding the visa for international remote work provided for in Law 14/2013 of 27 September on support for entrepreneurs and their internationalisation.
2.º As a result of acquiring the status of administrator of an entity. Where the entity qualifies as an asset-holding entity within the terms of article 5, paragraph 2, of the Corporate Income Tax Act, the administrator may not hold an interest in that entity which would make it a related entity within the terms of article 18 of Law 27/2014 of 27 November on Corporate Income Tax.
3.º As a result of carrying on in Spain an economic activity qualifying as an entrepreneurial activity, in accordance with the procedure described in article 70 of Law 14/2013 of 27 September, on the terms established by regulation.
4.º As a result of the carrying on in Spain of an economic activity by a highly qualified professional who provides services to startups within the meaning of article 3 of Law 28/2022 of 21 December on the promotion of the startup ecosystem, or who carries out training, research, development and innovation activities, receiving for this a remuneration which represents in total more than 40 % of all their business, professional and employment income. The manner of evidencing the status of highly qualified professional, and the requirements for classifying activities as training, research, development and innovation, shall be determined by regulation.
c) That they do not obtain income which would be classified as obtained through a permanent establishment situated in Spanish territory, except in the case provided for in letter b).3.º and 4.º of this paragraph.
A taxpayer who opts to be taxed under Non-Resident Income Tax shall be subject to Wealth Tax on the basis of real (territorial) liability.
The head of the Ministry of Finance and Public Administration shall establish the procedure for exercising the option referred to in this paragraph.
2. Application of this special regime shall entail, on the terms established by regulation, the determination of the Personal Income Tax debt in accordance with the rules established in the consolidated text of the Non-Resident Income Tax Act, approved by Royal Legislative Decree 5/2004 of 5 March, for income obtained without a permanent establishment, with the following special features:
a) The provisions of articles 5, 6, 8, 9, 10, 11 and 14 of chapter I of that consolidated text shall not apply. Nevertheless, the income from employment in kind referred to in letter a) of article 14.1 of that consolidated text shall be exempt.
b) All the income from economic activities qualifying as an entrepreneurial activity, or from employment, obtained by the taxpayer during the application of the special regime shall be deemed obtained in Spanish territory.
c) For the purposes of the assessment of the tax, the income obtained by the taxpayer in Spanish territory during the calendar year shall be taxed cumulatively, without any offsetting between items being possible.
d) The taxable base shall consist of all the income referred to in letter c) above, distinguishing between the income referred to in article 25.1.f) of the consolidated text of the Non-Resident Income Tax Act and the remaining income.
e) For the determination of the gross tax liability:
1.º The rates indicated in the following scale shall be applied to the taxable base, except the part of it corresponding to the income referred to in article 25.1.f) of the consolidated text of the Non-Resident Income Tax Act:
| Taxable base (euros) | Rate (%) |
|---|---|
| Up to 600,000 euros | 24 |
| From 600,000.01 euros upwards | 47 |
2.º The rates indicated in the following scale shall be applied to the part of the taxable base corresponding to the income referred to in article 25.1.f) of the consolidated text of the Non-Resident Income Tax Act:
| Savings taxable base up to (euros) | Gross tax (euros) | Remaining savings base up to (euros) | Rate (%) |
|---|---|---|---|
| 0 | 0 | 6,000 | 19 |
| 6,000.00 | 1,140 | 44,000 | 21 |
| 50,000.00 | 10,380 | 150,000 | 23 |
| 200,000.00 | 44,880 | Upwards | 26 |
f) Withholdings and payments on account of the tax shall be made, on the terms established by regulation, in accordance with the Non-Resident Income Tax rules.
Nevertheless, the withholding or payment-on-account rate on income from employment shall be 24 per cent. Where the remuneration paid by the same payer of income from employment during the calendar year exceeds 600,000 euros, the withholding rate applicable to the excess shall be 47 per cent.
3. The spouse of the taxpayer referred to in paragraph 1 above and their children under twenty-five, or of any age in the case of disability, or, where there is no marriage, the other parent of the children, may also opt to be taxed under Non-Resident Income Tax, with the special rules provided for in paragraph 2 of this article, while retaining the status of Personal Income Tax taxpayers, provided that the following conditions are met:
a) That they move to Spanish territory with the taxpayer referred to in paragraph 1 above, or at a later time, provided that the first tax period in which the special regime applies to that taxpayer has not ended.
b) That they acquire tax residence in Spain.
c) That they meet the conditions referred to in letters a) and c) of paragraph 1 of this article.
d) That the sum of the taxable bases referred to in letter d) of paragraph 2 of this article of these taxpayers, in each of the tax periods in which this special regime applies to them, is lower than the taxable base of the taxpayer referred to in paragraph 1 above.
The special regime shall apply during the successive tax periods in which, those conditions being met, it also applies to the taxpayer referred to in paragraph 1 above. The terms and conditions for the application of this special regime shall be established by regulation.»
Six. A new fifty-third additional provision is added, worded as follows:
«Fifty-third additional provision. Income from employment obtained from managing funds linked to entrepreneurship, innovation and the development of economic activity.
1. Income derived directly or indirectly from holdings, shares or other rights, including success fees, granting special economic rights in any of the entities listed in paragraph 2, obtained by the administrators, managers or employees of those entities or of their management companies or group entities, shall be regarded as income from employment.
2. The entities referred to in paragraph 1 are the following:
a) Closed-ended Alternative Investment Funds as defined in Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010, included in any of the following categories:
1.º Entities defined in article 3 of Law 22/2014 of 12 November regulating venture capital entities, other closed-ended collective investment entities and the management companies of closed-ended collective investment entities, and amending Law 35/2003 of 4 November on Collective Investment Institutions.
2.º European venture capital funds regulated in Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds.
3.º European social entrepreneurship funds regulated in Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds, and
4.º European long-term investment funds regulated in Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds.
b) Other investment undertakings similar to the foregoing.
3. The income from employment referred to in paragraph 1 shall be included in the tax base at 50 per cent of its amount, without any exemption or reduction applying, where the following requirements are met:
a) The special economic rights of those holdings, shares or rights are conditional on the other investors in the entity referred to in paragraph 2 above obtaining a minimum return defined in its rules or articles.
b) The holdings, shares or rights are held for a minimum period of five years, unless they are transferred on death, or are liquidated early, cease to have effect or are lost in whole or in part as a result of a change of management company, in which case they must have been held without interruption until those circumstances occur.
The provisions of this letter shall be required, where applicable, of the entities holding the holdings, shares or rights. The treatment provided for in this paragraph shall not apply where the special economic rights derive directly or indirectly from an entity resident in a country or territory classified as a non-cooperative jurisdiction, or with which there are no rules on mutual assistance in the exchange of tax information in the terms provided for in Law 58/2003 of 17 December, the General Tax Act, that are applicable.»
Fourth final provision. Amendment of Law 20/2007 of 11 July on the Statute of Self-Employed Work
A new article 38 quinquies is added to Law 20/2007 of 11 July on the Statute of Self-Employed Work, worded as follows:
«Article 38 quinquies. Contribution bonus for self-employed workers of startups in a situation of multiple activity.
1. Workers included in the Special Social Security Scheme for Self-Employed Workers by reason of holding effective control, direct or indirect, of a startup regulated in Law 28/2022 of 21 December on the promotion of the startup ecosystem, and who simultaneously work as employees for another employer, shall be entitled to a bonus of one hundred per cent of the contribution corresponding to the minimum base established generally, from time to time, in that special scheme during the first three years.
This bonus shall be incompatible with the contribution benefits provided for in articles 31 and 32.
2. This bonus shall be enjoyed continuously for as long as the situation of multiple activity persists and, at most, during the first three years, counted from the date of the registration arising from the commencement of the self-employed activity by reason of dedication to the startup.
The bonus shall in any event end at the time the situation of multiple activity ceases, and its application may not be restarted subsequently in the event of a new situation of multiple activity arising.
3. The bonus shall be applied by the General Treasury of Social Security in accordance with the data, programmes and computer applications available from time to time for the assessment and collection management of Social Security, following the submission of a responsible declaration by the self-employed worker; without prejudice to its control and review by the Labour and Social Security Inspectorate, the General Treasury of Social Security and the State Public Employment Service, in the exercise of their respective powers.
4. The bonus provided for in this article shall be financed from the budget of the State Public Employment Service within its area of competence and in accordance with its budgetary availability.»
Where this sits
The next page translates the fifth final provision, which rewrote the residence chapters of the Entrepreneurs Act (Law 14/2013): the entrepreneur and highly qualified professional permits, and the visa and residence permit for international remote work.
Nothing here is advice on your own position, and this reading is not the official text. Spain publishes no official English version of this Act; where the wording matters to a decision, read it against the Spanish original linked above.