BASQUE COUNTRY
FISCAL AND FINANCIAL AUTONOMY
The Basque Country is an autonomous community which, as part of the Spanish autonomous system, has its own management and regulatory capacity. However, the Basque Country, in the same way as Navarre, has a differentiating characteristic with respect to the rest of the autonomous communities, which is the economic agreement. This system grants the Basque institutions great fiscal and financial autonomy, including the historic territories of Alava, Bizkaia and Gipuzkoa, which are responsible for collecting taxes. This system gives the Basque Country discretion in the collection and administration of taxes, in accordance with its own budgets and the agreements signed by the Central Administration (since the agreement is an agreement signed between the State and the Basque Country). All this has provided the Basque Country with sufficient resources for the development of its self-government and the financing of the autonomous competences in the various matters within its remit.
On the basis of the Basque historic territories’ capacity to collect taxes, corporation tax is configured as follows in the Basque Country:
METER TABLA
Likewise, the Basque Country has the highest national spending per inhabitant on education, health, social services and many other variables, including high public spending on investment in research and business support measures. Promoting the creation of new companies and business development are two of the major commitments of Basque institutions, for which the government uses different instruments available to the public for the creation, development and consolidation of new companies. In this sense, there are both public and private funds aimed at business promotion:
- Public funds specific to each stage of the business cycle
- Refundable advances
- Low interest loans
- Tax incentives
- Occupational training
- Subsidies for R&D projects
- Establishment in Technology Parks
- Proactive Private Funds for investment in companies
- Mutual Guarantee Societies
- Financial Entities
- Social Entities
- Specific Funds
- Business Angels Network
- Seed Funds
Finally, the Basque Country has more types of subsidies:
- The Basque Country is one of the European leaders in Research, Development and Innovation (R&D) capacity thanks to the support of its public institutions.
- The Basque Country offers a large number of tax incentives in the field of Industrial and Intellectual Property, Patents and Trademarks.
- Investment in the environment, job creation and financing is highly incentivised by Basque financial institutions.
- There is a reduction in the tax base and in the purchase of shares for investments in companies with a Startup business structure.
COMUNIDAD FORAL DE NAVARRA
Like the Basque Country, Navarre is an autonomous community of Spain with an Economic Agreement deriving from its historical rights. It has the power to establish and collect the taxes corresponding to its territory with which it finances the public services under its jurisdiction. Those competences that are not assumed by the Community are paid to the State through the corresponding amount, with which the central administration exercises its powers. All this gives the Autonomous Community of Navarre a high degree of autonomy that allows it to maintain its own differentiated tax regime.
Among the tax benefits offered by the region, the following stand out:
- Significant tax deductions for innovative activity
- Significant tax deductions to incentivise productive investments
- Lower tax rates than the Spanish average
- Taxes which, in relation to GDP, are in a much lower position compared to the European Union.
TABLA 1: TIPOS IMPOSITIVOS
TABLA 2: DEDUCCIONES
As far as tax depreciation is concerned, compared to the State and even to the Autonomous Community of Navarre, the Navarrese tax rate is 2/3 points higher on average than the State rate. There is freedom of depreciation for items of tangible fixed assets whose unit value does not exceed 1,800 euros and for items used exclusively and permanently for R+D.
As regards deductions from the tax base, 45% of the amount that would have been accounted for as a ‘Special Investment Reserve’ (REI) (60% in the case of SMEs) can be reduced from the tax base, up to a limit of 40% of the tax base. With a maximum amount of €50,000.
PAIS VASCO FRANCES, NOUVELLE AQUITAINE
Unlike Navarre or the Basque Country, in France practically all taxes are collected by the central administration, so the taxation system is general.
As for the rate of taxation payable by French companies, in 2022 the corporate tax rate was reduced to 25% for all companies. However, it is of interest that, for SMEs with a turnover of less than €7.63 million, there is a reduced rate of 15% for the first €38,120 of profit, and the standard rate thereafter. SMEs are also exempt from the additional French social contribution.
Existing tax reductions/exemptions in France are as follows:
- Investment in a company in France entitles to a tax reduction in case of cash payments made for the subscription of the initial capital or for capital increases for small companies. The amount of the tax reduction will be 18% for payments made from 1 January to 9 August, and 25% for payments made from 10 August to 31 December.
- Aquitaine, the department where the French Basque Country is located, is characterized as a place where rural revitalisation zones (ZRR) abound. For the creation of new businesses, these areas are eligible for exemption or reduction of benefits during the first years of activity, as follows: Full and then partial exemption from income tax is provided in principle for a period of 5 years followed by a partial exemption period of 3 years provided that less than 11 employees are employed.
TABLA
On the other hand, another tax advantage offered by the French government is the Research Tax Credit (CIR). This is a system that can benefit all industrial, commercial or agricultural companies, taxed according to their real profit (normal or simplified), regardless of their legal form. On the research and development side, the CIR is equal to 30% of expenditure within the limit of 100 million euros per year and 5% beyond this threshold. On the innovation side, the CIR is equal to 20% of eligible expenditure retained within the limit of €400,000 per year. Research expenditure may be retained in certain cases for more than 100% of its amount.
EUROREGION NOUVELLE AQUITAINE EUSKADI
The European Grouping of Territorial Cooperation Euroregion Aquitaine-Euskadi was created in 2011 with the main objective of ‘facilitating and promoting cross-border, transnational and/or interregional cooperation, hereinafter referred to as territorial cooperation, between the regions of Aquitaine and Euskadi, with the exclusive aim of strengthening economic and social cohesion’. Subsequently, in 2017, the Autonomous Community of Navarre joined the Euroregion.
The EGTC aims to implement territorial cooperation programmes or projects co-financed by the Union (especially the Structural Funds) and to carry out cooperation activities outside the Union. In this sense, the Strategic Document 2014-2020 allows the EGTC to position itself as an organiser, promoter, promoter and/or collaborator of the territorial cooperation policy.
Specifically, the projects developed through this institution include the funding of research in the fields of: Aeronautics, aerospace, advanced manufacturing and automobile; agriculture and agri-food industry; renewable energies; Marine and coastal resources; and health (Bio-health). This entire Research and Development ecosystem favours the insertion and growth of industrial sectors, as well as their insertion into the Basque market.