Turning innovation into tax advantage and competitive edge

Spain’s research and development sector groups 8,610 active companies and employs 128,434 workers registered with Social Security, with aggregate revenues of €3.0 billion and a gross margin of 15.8%. Beyond these figures, the sector acts as an engine of technology transfer across the wider economy: its 11.6% share of the European R&D market positions Spain as a significant player in the continental race for innovation. The five-year survival rate of 46.2% is the lowest of any sector we advise — a reflection of the inherent difficulty of research-based business models, with their long cycles, technical uncertainty and dependence on public funding — and of the critical importance of a correctly designed legal and tax structure from day one.

Spain possesses a solid — though underutilised — system of public incentives for research and development. The Article 35 LIS deductions are, alongside the Article 23 Patent Box, the most powerful fiscal instruments available to companies with significant innovation activity: in years where R&D expenditure exceeds the two-year average, the marginal deduction on incremental spending reaches 42%, and unused deductions can be refunded or carried forward up to 50% of gross tax liability. Despite these incentives, take-up among Spanish companies remains low — largely due to lack of awareness or inadequate technical documentation.

At BMC we work with R&D departments of industrial groups, private technology centres, university spin-offs and deep-tech startups to identify, quantify and defend all available deduction bases. Our method combines fiscal expertise with a genuine understanding of technology projects: we review projects alongside technical teams, classify activities according to the Frascati Manual criteria and AEAT doctrine, prepare the technical memorandum for MINECO reasoned reports and build the documentary file needed to defend the deduction in an audit. Where applicable, we coordinate the application for deduction monetisation with the AEAT to recover cash even in years with insufficient tax liability.

Grant management and public funding is the other pillar of our service. We accompany clients from identifying the right funding call through to economic and technical justification before the funding body, covering application drafting, project term negotiation and management of advances and special conditions. At the international level — where Spain’s 11.6% European share opens meaningful doors to EU programmes — we assist Spanish companies in submitting proposals to Horizon Europe, particularly through the EIC Accelerator and EIC Pathfinder instruments, and in establishing European R&D consortia, including negotiation of consortium agreements and confidentiality and results exploitation agreements.