The decision to hire a worker in a small company implies for the employer the need to resolve different mandatory legal procedures, and at the same time it can provide -in addition to Social Security bonuses- significant tax savings in Corporate Tax (IS). of the company
Let us remember that the current Corporation Tax Law (LIS) has a limited range of deductions in the tax quota, because it has eliminated many of the old deductions, leaving the following in force:
- Deduction for research and development and technological innovation (art. 35 LIS)
- Deduction for investments in audiovisual productions and live shows (art. 36 LIS)
- Deduction for job creation (art. 37 LIS)
- Deduction for job creation for disabled workers (art. 38 LIS)
- Deduction for donations
Taking the above into account, it is interesting to know what Fortress Tax Relief benefits the IS standard includes for companies that hire workers, as well as the requirements and application limits.
Indefinite contracts to support entrepreneurs (art. 37 LIS)
Companies that enter into an indefinite employment contract to support entrepreneurs, in addition to enjoying discounts on the business contribution to Social Security, can apply the following tax incentives:
It is important to point out that the worker will be able to continue charging if he wants 25% of his unemployment benefit.
The application of this second type of deduction is subject to the following rules:
- The hired worker must have received the unemployment benefit for at least 3 months before the start of the employment relationship. For these purposes, the company must request the worker a certificate from the State Public Employment Service.
- This deduction will be applicable with respect to those contracts carried out in the tax period until reaching a workforce of 50 workers, and provided that, in the 12 months following the start of the employment relationship, there is an increase in the workforce for each worker. total average of the entity in, at least, one unit with respect to the existing one in the previous 12 months.
Workers with disabilities (art. 38 LIS)
The amount of this deduction is:
‐ 9,000 euros for each person/year of increase in the average workforce of workers with disabilities to a degree equal to or greater than 33% and less than 65%, experienced during the tax period, compared to the average workforce of workers of the same nature of the immediately preceding period.
‐ 12,000 euros when this increase in the workforce refers to workers with a degree of disability equal to or greater than 65%.
Finally, it remains to be noted that these deductions are incompatible with the freedom of amortization that SMEs enjoy if they create employment (art.102 LIS), so that the same worker cannot be taken into account for the application of both tax benefits. Consequently, if during the year the company had acquired any new asset capable of being freely amortized, it must make calculations and opt for the incentive that represents the greatest tax savings.
