30 Oct MADRID APROVES ITS 20% DEDUCTION IN PERSONAL INCOME TAX FOR FOREIGN INVESTMENT

The law, which is being submitted to the Assembly of Madrid today, shall be applied retroactively from 1 January to foreign investments or Spanish investments abroad who settle in the region.

The Law stipulates a 20% deduction in regional personal income tax for those residents abroad, Spanish or foreigners, who decide to settle and invest in Madrid.

This Law is intended to attract investments and taxpayers from abroad with the objective of further stimulating the creation of employment and wealth in the region.

The new tax incentive is intended for foreigners or Spanish residents abroad who have been residing outside Spain for more than five years and who decide to establish their tax residence in the Community of Madrid and invest in that region. The 20% deduction shall be applicable to different asset classes such as investments in debentures, Treasury bills and bonds; the purchase of shares in listed and unlisted companies, or equity shareholdings in companies and businesses.

The regulation approved today does not contemplate real property investments, that is, the purchase of dwellings, garages or other types of real property assets shall not benefit from this personal income tax reduction.

To be eligible for this new tax incentive, Madrid requires maintaining both investment and tax residency in the region for a minimum of 6 years.

 19/06/2024