Start-up tax adviser: efficient taxation from day one

Tech start-ups have tax needs radically different from those of a traditional SME. The 2022 Start-up Law created a specific tax regime with reduced rates, enhanced investor deductions, and a favourable treatment for stock options — but few start-ups activate it correctly from the outset. R&D&I deductions — which can amount to an effective rebate of 25–42% of development costs — go unused because activities are not correctly documented or classified. And when an international investor arrives — a VC fund or overseas business angel — the tax structuring of the round can determine whether the transaction is efficient or penalising.

Since 2010 · 16 years Tax agent AEAT

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Why BM Consulting

Specialised advice and personal service

At BMC we accompany tech start-ups from incorporation through to investment rounds and international expansion. We activate the Start-up Law regime, optimise R&D&I deductions, design stock option plans with the most tax-efficient treatment, and structure investment rounds to be tax-efficient for both founder and investor.

  • Ley 28/2022 (Startups Law) provides 15% CIT for the first 4 profitable years, 2-year tax payment deferral without guarantees, €50,000 annual stock option exemption per employee (deferred to share sale), and 50% IRPF deduction for investors (up to €100,000/year) — all conditional on ENISA certification; the certification must be in place before the first profitable year to capture all 4 years.

  • R&D deduction under Art. 35 LIS generates credits of up to 42% on qualifying incremental expenditure — motivated reports from the Ministry of Science or ENISA create a binding presumption of qualification that the AEAT must rebut with specific evidence; for loss-making startups, early monetisation of deductions is possible under LIS Art. 39.

  • Stock options over real shares under Ley 28/2022

    the €50,000 annual exemption applies at exercise (or better

  • Holding structure above the startup should be established before the first external investor round — founding the holding after the round creates a higher valuation at transfer, potentially triggering gift tax or IRPF on the deemed transfer from founders to the holding.

How we work

From first contact to case completion

  1. Activating the Start-up Law regime

    We apply for ENISA emerging company certification to activate the 15% Corporate Income Tax rate for the first four years with taxable income, deferral of tax debts without security or interest, and the favourable tax regime for investors and employees.

  2. R&D&I deduction optimisation

    We identify and document the company's R&D&I activities, coordinate motivated reports with the Ministry of Science, and apply the Article 35 CIT deductions. For loss-making start-ups, we explore early monetisation of the deductions.

  3. Stock option plan design

    We structure the equity remuneration plan (stock options, phantom shares, RSUs) so that founders and key employees are taxed as efficiently as possible: deferral of the taxable event, the €50,000 exemption under the Start-up Law, and taxation as capital gain on disposal.

  4. Investment round structuring

    We advise on the corporate structure ahead of a round (holding, dual-class shares, convertible loans / SAFEs) and on the tax implications of each investment format for the founder, employees, and investor.

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The problem

Tech start-ups have tax needs radically different from those of a traditional SME. The 2022 Start-up Law created a specific tax regime with reduced rates, enhanced investor deductions, and a favourable treatment for stock options — but few start-ups activate it correctly from the outset. R&D&I deductions — which can amount to an effective rebate of 25–42% of development costs — go unused because activities are not correctly documented or classified. And when an international investor arrives — a VC fund or overseas business angel — the tax structuring of the round can determine whether the transaction is efficient or penalising.

Our solution

At BMC we accompany tech start-ups from incorporation through to investment rounds and international expansion. We activate the Start-up Law regime, optimise R&D&I deductions, design stock option plans with the most tax-efficient treatment, and structure investment rounds to be tax-efficient for both founder and investor.

Process

How we do it

1

Activating the Start-up Law regime

We apply for ENISA emerging company certification to activate the 15% Corporate Income Tax rate for the first four years with taxable income, deferral of tax debts without security or interest, and the favourable tax regime for investors and employees.

2

R&D&I deduction optimisation

We identify and document the company's R&D&I activities, coordinate motivated reports with the Ministry of Science, and apply the Article 35 CIT deductions. For loss-making start-ups, we explore early monetisation of the deductions.

3

Stock option plan design

We structure the equity remuneration plan (stock options, phantom shares, RSUs) so that founders and key employees are taxed as efficiently as possible: deferral of the taxable event, the €50,000 exemption under the Start-up Law, and taxation as capital gain on disposal.

4

Investment round structuring

We advise on the corporate structure ahead of a round (holding, dual-class shares, convertible loans / SAFEs) and on the tax implications of each investment format for the founder, employees, and investor.

Tech start-ups: a dedicated tax regime that must be activated

The 2022 Start-up Law created, for the first time in Spain, a differentiated tax regime for emerging technology companies. Reduced rates, enhanced deductions, favourable treatment for equity remuneration plans, and a framework for venture capital investors that previously did not exist. But most start-ups do not fully activate this regime because it requires prior certification, specific documentation, and advice that combines knowledge of tax law with understanding of the entrepreneurial ecosystem.

At BMC we have accompanied start-ups from the pre-seed stage through to internationalisation. We speak the ecosystem’s language — rounds, cap tables, liquidation preferences, cliff, vesting — and translate it into a tax framework so that every strategic decision is also tax-efficient.

R&D&I deductions: the key tax asset for tech companies

Tech start-ups spend on product development from day one. A significant portion of that expenditure can generate tax deductions of up to 42% of qualifying R&D costs under Corporate Income Tax. The problem is that few start-ups correctly document the activities qualifying as R&D (research and development of new knowledge) as distinct from technological innovation (applying existing knowledge in a novel way).

We analyse the product roadmap, identify qualifying activities and eligible expenditure, coordinate motivated reports with the Ministry of Science to give legal certainty to the deductions, and apply them in the Corporate Income Tax return. For loss-making start-ups — the typical situation — we explore early monetisation of the deductions.

Stock options: designing an efficient equity plan

The equity plan — how founders, early employees, and key executives are remunerated in shares — is one of the most important tax decisions a start-up makes. A poorly designed plan can generate taxation as employment income (up to 47% marginal rate) instead of capital gain (up to 28%). Under the Start-up Law, the first €50,000 per year of option income is exempt for employees of certified companies.

We design the equity plan from the outset: choice of instrument (stock options, phantom shares, RSUs, direct shares), vesting schedule, cliff, acceleration provisions, and tax treatment at each stage of the cycle (grant, vesting, exercise, sale).

International structuring: Spain as a European hub

Many Spanish start-ups consider relocating to Ireland, the Netherlands, or the UK for tax reasons. At BMC we assess whether such relocation is genuinely more efficient or whether — with correct structuring from Spain, applying the Start-up Law regime, R&D deductions, and efficient IP management — Spanish taxation is competitive. For those that decide to internationalise, we advise on the most efficient structure with regard to the applicable DTT and transfer pricing rules.

Consult our team specialist in start-up taxation for an initial review of your tax position.

What comes next

FAQ

Frequently asked questions

Law 28/2022 provides: a 15% Corporate Income Tax rate for the first four years with taxable income, deferral of tax debts in the first two years without guarantee or interest, exemption of the first €50,000 per year of stock option income for employees of certified start-ups, and an enhanced deduction for investment in emerging companies (up to 50% of €100,000/year for individual investors).
An individual investor acquiring shares in a certified emerging company may deduct 50% of the investment from their IRPF liability, with a maximum base of €100,000 per year. If the investment is held and the start-up grows, the capital gain on disposal may be exempt if reinvested in another qualifying emerging company. This combination makes the tax profile of start-up investment very attractive for business angels in Spain.
Stock options are options to purchase real shares: the employee is taxed when the option is exercised (on the difference between exercise price and market value) or, under the Start-up Law, when the shares are sold. Phantom shares are a notional economic right taxed as employment income when settled. RSUs are restricted stock units taxed when they vest. Under the Start-up Law, options over real shares have the most favourable treatment: the €50,000 exemption and taxation as capital gain on exit.
A holding structure is advisable when there are multiple founders with divergent long-term interests, when investors are expected to enter the operating entity and it is useful to separate the founders' original stake from the operating entity, when material assets (intellectual property, brand) should be protected in a separate entity, or when internationalisation via subsidiaries is planned. The optimal moment to establish the holding is before the first external investor round.
The investment itself generates no tax for the start-up. The tax implications are for the investor: the dividends and capital gains it earns may be subject to Spanish IRNR withholding, mitigated or eliminated by the applicable DTT. For the founder, the key lies in the round's structure: if the investment is made via a capital increase, the price per share determines the market value of the founder's shares, which has implications for any future sale or stock option plan settlement.
The Art. 35 LIS R&D&I deduction is highly valuable — up to 42% credit on qualifying incremental expenditure — but it is also frequently targeted in AEAT inspections. The three-layer documentation defence consists of: (1) technical documentation classifying each project as R&D or technological innovation, supported by internal project records, personnel time allocation by project, and technical reports; (2) a motivated report (informe motivado) from the Ministry of Science or ENISA confirming the qualifying nature of the activities — this report creates a binding presumption that the AEAT must rebut with specific evidence to challenge the deduction; and (3) financial documentation linking qualifying expenditure to the projects. BMC coordinates the technical and legal documentation and manages the motivated report application process.

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Frequently asked questions

Questions about Tax Adviser for Tech Start-ups and Scale-ups

Law 28/2022 provides: a 15% Corporate Income Tax rate for the first four years with taxable income, deferral of tax debts in the first two years without guarantee or interest, exemption of the first €50,000 per year of stock option income for employees of certified start-ups, and an enhanced deduction for investment in emerging companies (up to 50% of €100,000/year for individual investors).
An individual investor acquiring shares in a certified emerging company may deduct 50% of the investment from their IRPF liability, with a maximum base of €100,000 per year. If the investment is held and the start-up grows, the capital gain on disposal may be exempt if reinvested in another qualifying emerging company. This combination makes the tax profile of start-up investment very attractive for business angels in Spain.
Stock options are options to purchase real shares: the employee is taxed when the option is exercised (on the difference between exercise price and market value) or, under the Start-up Law, when the shares are sold. Phantom shares are a notional economic right taxed as employment income when settled. RSUs are restricted stock units taxed when they vest. Under the Start-up Law, options over real shares have the most favourable treatment: the €50,000 exemption and taxation as capital gain on exit.
A holding structure is advisable when there are multiple founders with divergent long-term interests, when investors are expected to enter the operating entity and it is useful to separate the founders' original stake from the operating entity, when material assets (intellectual property, brand) should be protected in a separate entity, or when internationalisation via subsidiaries is planned. The optimal moment to establish the holding is before the first external investor round.
The investment itself generates no tax for the start-up. The tax implications are for the investor: the dividends and capital gains it earns may be subject to Spanish IRNR withholding, mitigated or eliminated by the applicable DTT. For the founder, the key lies in the round's structure: if the investment is made via a capital increase, the price per share determines the market value of the founder's shares, which has implications for any future sale or stock option plan settlement.
The Art. 35 LIS R&D&I deduction is highly valuable — up to 42% credit on qualifying incremental expenditure — but it is also frequently targeted in AEAT inspections. The three-layer documentation defence consists of: (1) technical documentation classifying each project as R&D or technological innovation, supported by internal project records, personnel time allocation by project, and technical reports; (2) a motivated report (informe motivado) from the Ministry of Science or ENISA confirming the qualifying nature of the activities — this report creates a binding presumption that the AEAT must rebut with specific evidence to challenge the deduction; and (3) financial documentation linking qualifying expenditure to the projects. BMC coordinates the technical and legal documentation and manages the motivated report application process.
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