Grupo Asegi identifies and applies the most powerful foral deductions for SMEs in Bizkaia, Gipuzkoa and Araba. They are substantially more generous than those of the common regime, especially for R&D&I, job creation, investment in assets and training.

A well-advised SME can cut its tax bill by between 15% and 40% by applying the available deductions correctly.

The Basque foral regime rewards investment more than the common regime

Unlike the state common regime, the foral regime of the Basque Country gives priority to productive investment and job creation through broader deductions and higher percentages.

Companies that invest in innovation, hire permanent staff or renew their productive assets pay significantly less Corporate Income Tax in Bizkaia, Gipuzkoa or Araba than in a common-regime region.

Scope note: this article refers to the foral regime of the Autonomous Community of the Basque Country (Bizkaia, Gipuzkoa and Araba). Navarra has its own regime under the Economic Convention, with different rates, deductions and deadlines; if your company pays tax in Navarra, ask us about your particular case.

R&D&I deduction (the most powerful)

What counts as R&D and what counts as technological innovation

  • Research and Development (R&D): projects seeking to generate new knowledge or significant technological applications. It includes the development of prototypes, new products or processes.
  • Technological Innovation (TI): significant improvements to existing products or processes through the incorporation of technology.

Applicable percentages and annual limit

The percentages applicable under the foral regime are higher than the state ones. They apply to the direct costs of the project (staff, materials, specific depreciation, external collaborations).

Deduction for creating stable employment

The foral regime rewards the creation of permanent employment. For every new permanent contract that meets certain requirements (minimum duration, maintenance of headcount), the company can apply a deduction of a significant amount against its tax liability.

Deduction for investment in new assets

Investments in new items of tangible fixed assets (machinery, productive equipment) generate deductions on the amount invested. Foral legislation particularly rewards investments that improve productivity or reduce environmental impact.

Deduction for staff training

Staff training costs (courses, continuing training, technical specialisation) give rise to deductions on the amounts invested.

Deductions specific to family businesses and holding companies

  • Exemption for intra-group dividends and capital gains.
  • Reductions in Inheritance Tax for the transfer of family business shareholdings.
  • Special tax neutrality regime for restructurings.

How to apply them correctly and avoid inspections

  • Technical documentation: especially for R&D&I, it is advisable to have technical reports and, where appropriate, reasoned reports from certifying bodies.
  • Keeping the requirements in place: many deductions require the investment, the employment or the shareholding to be maintained for a minimum period.
  • Accounting traceability: the annual accounts must clearly reflect the projects, contracts or investments that justify each deduction.
  • Consistency with previous returns: the Foral Tax Authority cross-checks information between financial years.

Frequently asked questions

Are deductions applied before or after the tax liability is calculated?
Deductions are applied to the gross tax liability, not to the taxable base. A deduction of €10,000 reduces the tax bill by €10,000.
Is there a maximum limit on deductions per financial year?
Yes. There is a maximum limit on the gross tax liability. Deductions that are not applied can be applied in later financial years.
Can an SME combine several deductions at once?
Yes. An SME can apply deductions for R&D&I, job creation, investment in assets and training at the same time.
How do I prove that a project qualifies as R&D&I?
Through a detailed technical report, accounting documentation that separates out the project costs and, on major projects, a reasoned report from a competent certifying body.
Can I go back and use deductions from previous years?
Deductions generated in one financial year and not applied can be applied in later financial years within the time limits laid down.

General information only; it does not replace professional advice. Foral legislation changes frequently — check the date it was last updated.