A new era for family businesses in Madrid
The Community of Madrid has taken a significant step towards supporting family businesses by approving a bill that introduces important changes to the Inheritance and Donations Tax. This new legal framework aims to facilitate generational change and ensure business continuity, a measure that could transform the business landscape in the region.
In a press conference held by President Isabel Díaz Ayuso, it was revealed that one of the highlights of the project is the increase in the reduction of the taxable base in cases of business transfer. The reduction will rise from 95% to 99%, provided certain conditions are met. This measure is designed to ease the tax burden on family businesses, thus allowing for a smoother transition between generations.
Furthermore, this legislation significantly expands the group of people who can benefit from these tax advantages. In addition to direct descendants and spouses, now brothers, uncles, nephews, and cousins will also be able to take advantage of these reductions. A notable inclusion is the possibility for employees who have worked for years with family businesses; those with at least ten years in the company and four years in managerial roles will be able to access these benefits. “Often, these individuals are not recognized within the family unit and are part of the household,” Ayuso emphasized.
The project also seeks to simplify the requirements needed to access these incentives. Restrictions such as the minimum age of the donor or that the business activity be their main source of income are being removed. These modifications are designed to make tax advantages more accessible to a larger number of taxpayers.
According to estimates presented alongside the project, approximately 1,500 taxpayers are expected to benefit annually, which could translate into tax savings of nearly two million euros each year. The forecast is that this law will receive its final approval around mid-year and come into effect immediately after its official publication.
As Madrid moves towards this new regulation, it is clear that the regional government is committed to strengthening the local business fabric. The proposed measures not only aim to facilitate generational transfer but also to recognize and value the crucial role that loyal employees play within the family business ecosystem.
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