Exporting to Spain represents a growing opportunity for Italian companies due to the strong history of economic and trade relations between Italy and Spain, which benefit from geographic and cultural proximity and similar consumer orientations. Despite global challenges, Italy and Spain have continued to be strategic markets for each other, both as outlets for exports and as destinations for investment.
The nation offers a favorable environment for trade due to its moderate tax burden and tax incentives for business and investment.
In 2023, Italian exports to Spain are. grew by 2.1%, reaching almost 33 billion euros. Spain is confirmed as the third largest market in the EU for Italy, supported by a positive trend fostered by the dynamism of public and private investment, backed by European funds from the Next Generation EU plan. The Plan de Recuperación, Transformación y Resiliencia Spanish, similar to Italy's NRP, has an allocation of 140 billion euros, the second highest in Europe after Italy's.
In this article, we will explore the opportunities offered by the Spanish tax regime for foreign investors, highlighting how these can further boost exports.
Spain and Italy have signed a Convention against double taxation, effective November 24, 1980, to prevent tax evasion and facilitate the exchange of information.
The nation adopts a quasi-federal tax system, which gives extensive autonomy to each autonomous community. This system allows some areas to be more fiscally advantageous than others, as regions receive a significant portion of tax revenues and can independently change the rates of the Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF) and other taxes such as property taxes. This tax flexibility is favorable for exports, as companies can benefit from more advantageous tax conditions in certain regions, thus reducing operating costs.
You are considered a tax resident of Spain if you stay in the country for more than 183 days during the calendar year or if the center of your economic interests or business activity is in the territory.
Non-tax residents in Spain are subject to the Impuesto sobre la Renta de los No Residentes (IRNR), which applies only to income produced in Spanish territory.
Recently, Spain introduced relevant regulatory updates with Royal Decree 1008/2023, published in the Spanish Official Gazette on December 5, 2023.
La Beckham Law, first introduced in 2005, represents an attractive opportunity for expatriates and their employers. This special tax regime allows individuals who acquire tax residence in Spain to opt for nonresident taxation for the first six years, provided they meet certain conditions.
Expatriates who acquire tax residence in Spain can benefit from a reduced tax rate of 24% on employment income up to 600,000 euros, with a rate of 47% for the excess. In addition, capital gains, dividends and interest earned abroad are exempt from taxation in Spain, while wealth tax is applicable only on assets located in Spain.
Royal Decree 1008/2023 responds to the need to adapt the Regulations on Personal Income Tax (IRPF) to the changes introduced by the Startup Law effective January 1, 2023. The main changes include:
This advantageous tax regime can be particularly useful for those who intend to export to Spain, as it facilitates entry and operation in the Spanish market by reducing the tax burden for employees and relocated entrepreneurs.
To access the tax benefits of the Beckham Act, the following requirements must be met:
Application for the favorable tax regime under the Beckham Act must be made by submitting the Form 149 to the Spanish tax authorities, accompanied by documentation proving that you meet the requirements. The application must be submitted within the first six months from the date of registration as an employee with the Spanish Social Security Office or from the date of commencement of the provision of services in Spain according to the social security posting certificate of the country of origin. If successful, a certificate granting the application of the special scheme will be issued.
We have already written guides on the conditions and opportunities for setting up a company in countries such as India e United States. For those who wish to export to Spain, open a company in the territory, this country represents one of the most attractive destinations for a European entrepreneur. Spain offers a lower IRES rate than Italy and does not charge additional taxes such as IRAP.
Companies resident in Spain are subject to corporate income tax (Impuesto sobre Sociedades, IS) under the worldwide income principle. Spanish territory includes mainland Spain, the Balearic Islands, the Canary Islands, and the enclaves of Ceuta and Melilla in Morocco. Companies located in the Basque Country, Ceuta, Melilla and Navarre, Ceuta and Melilla benefit from special tax regimes.
Companies considered nonresidents are those not registered under Spanish law and without a registered office or place of management in the country. These are subject to non-resident income tax (IRNR), which taxes only Spanish-source income. For resident companies, the IS tax base includes income and capital gains on assets.
With an additional surtax linked to Chamber of Commerce registration. Entities subject to this tax include:
A reduced rate of 15% applies to small companies (with profits up to 10 million euros) and new companies for the first two years of profits. Companies operating in the hydrocarbon sector are taxed at 30%.
Nonresident companies receiving income in Spain without a permanent establishment are taxed at 19% if resident in the EU or EEA, and at 24% for other jurisdictions. Capital gains are taxed at 19%. If they operate through a permanent establishment, the rate is 25%, and for the hydrocarbon sector it is 35%. Remittances from subsidiaries to the parent company are subject to an additional tax of 19%, with specific exceptions.
Octagona, with its expertise in the’internationalization and business strategies, can guide Italian companies wishing to export to Spain, optimizing their activities to penetrate the Spanish market. By thoroughly analyzing the tax scenario of the export recipient country, we offer customized consultations that help companies take full advantage of available tax benefits and reduce operating expenses, ensuring a more efficient and profitable management of their international activities.
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