The tax incentives that you should know

• Discover the tax incentives and aid available in the Community of Madrid

Aid for the promotion of CSR and work-life balance

This aid program consists of two lines:

• Implementation of social responsibility in the self-employed and small businesses.
• Reconciliation of work, family and personal life through economic incentives to promote teleworking and flexible hours.

Self-employed or self-employed workers, small businesses and civil companies with legal personality, which carry out their activity in the Community of Madrid, can apply for them. In both cases, specific requirements are detailed.

Aid to workers who are self-employed

This is aid that subsidizes part of the expenses necessary to start up your business activity.

You can request them:

• Unemployed individuals who register as self-employed workers, self-employed in the corresponding Social Security regime or in the mutual benefit of the corresponding professional association.
• The persons provided for in the previous point who are members of civil societies or communities of property. Also partners of commercial companies, as long as they are not members of the company's administrative body.
• The people provided for in the first point, who are worker or labor partners of cooperatives or labor societies.

The deadline for submitting applications It will be three months from the start date of the self-employed worker's activity.

The application must be submitted after the start of your activity as a self-employed worker, and once the expenses have been incurred and the payments derived from the start-up of your activity have been made.

Extension of the flat rate for freelancers

This is aid that allows self-employed workers in the Community of Madrid to extend the flat rate of Social Security contributions for a maximum of twelve additional months; When the initial period of the state incentive ends, the self-employed will receive financial aid from the Community of Madrid, which will allow them to maintain the cost of paying their Social Security contributions for an additional 12 months.

Self-employed workers who have registered in the Special Regime for Self-Employed Social Security Workers (RETA) or in the Special System for Agricultural Self-Employed Workers (SETA) can apply for it, meeting the requirements to be beneficiaries of the state flat rate.

Also members of associated labor cooperatives or labor societies included in the RETA.

Self-employed workers who have registered with the RETA and meet the conditions to be beneficiaries may submit the application during the last two months of the initial period of enjoying the state reduction and until the last day of the second month following the aforementioned period.

Zero rate for self-employed

The purpose of the aid is the promotion and consolidation of self-employment in the Community of Madrid through the granting of aid called Zero Rate of the Community of Madrid to self-employed or self-employed workers who are covered by the "Incentives and relief measures". promotion and promotion of Self-Employed Work.

These are the requirements:

• Registration in RETA as of January 1, 2023.
• Carry out your activity in the Community of Madrid.
• Be or have been a beneficiary of the reductions provided for in articles 38 bis, 38 ter and 38 quater of Law 20/2007, of July 11, of the Statute of self-employment.
• Be up to date with tax obligations with the State Administration, with the Community of Madrid and with Social Security.

Program for the Promotion of Collective Entrepreneurship

This is an Aid Program that consists of four lines:

• Support for the creation of new cooperatives, labor societies and integration companies.
• Support for the advisory service of self-employed associations and the social economy.
• Financing of investments necessary for the creation of social economy companies, including their expansion and development.
• Support for the incorporation of partners into social economy companies.

Single payment of the contributory benefit

If you are thinking about starting self-employment, you can benefit from the single payment to set up your company; This measure facilitates self-employment initiatives by paying the amount of unemployment benefit to the beneficiaries in a single payment.

Beneficiaries of the single payment or capitalization may be beneficiaries of a contributory level unemployment benefit, who intend to start a business, individual or corporate project. Those who receive a subsidy, active insertion income or any other assistance benefit cannot access it.

In this case, the application must be submitted prior to registering as a self-employed or self-employed worker.

Help for the Payment of Social Security Contributions, after capitalizing the unemployment benefit

These are subsidies consisting of the payment of Social Security contributions to recipients of unemployment benefits in their single payment modality.

Those who have capitalized the unemployment benefit or cessation of activity in the form of a single lump sum payment for its current value or total capitalization, certified by one of the managing offices of the State Public Employment Service (SEPE), can apply for this aid.

The deadline for submitting applications is 6 months from the date of registration in the corresponding Social Security regime.

More information about these aids

Tax incentives

If you live in the Community of Madrid you will enjoy the following fiscal benefits:

Deduction for investment in newly or recently created entities

If you live in the Community of Madrid, you can apply a personal income tax deduction for amounts invested in shares or participations in new or recently created companies.

It has a 30% deduction percentage of the investment and a deduction limit of 6,000 euros per year.

Deduction for investment in entities listed on the Alternative Stock Market

This is a deduction for 20% of the amounts invested in shares of entities listed on the Alternative Stock Market. It is incompatible with the previous deduction.

To be able to access it, you cannot have more than 10% of the entity's capital, you must maintain participation for at least two years and the entity must have its domicile in the Community of Madrid.

Deduction to promote self-employment of those under 35 years of age

If you are under 35 years old and begin exercising your business or professional activity, you can apply a deduction of 1,000 euros in personal income tax that year.

This requires that the exercise of economic activity be continued for at least one year.

Deduction for donations to foundations and sports clubs

The deduction percentage will be 15 percent of the amounts donated to foundations established in accordance with Law 1/1998, of March 2, on Foundations of the Community of Madrid.

It can also be applied to donations made to elementary and basic sports clubs. In any case, the deduction base for deductible donations cannot exceed 10 percent of the taxpayer's taxable base.

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