The Assembly of the Community of Madrid today approved the law that allows foreigners who establish their tax domicile in the autonomous community to deduct 20% of the investments they make in companies or in purchases of financial products in the autonomous community. The law known as the Mbappé Law is only activated if the beneficiary establishes his residence in Madrid and maintains it for six years and maintains his investments for that same period of time. The rule opens a new confrontation with other communities to attract high-income taxpayers.
In a statement, the Community Treasury Department explained today that contributions made in “obligations, bonds, treasury bills, shares of listed and unlisted companies or contributions in limited companies, among others” will be subject to deduction. The purchase of real estate is excluded.
That is one of the main changes compared to the first bill that was made public in January 2023, two years ago. That first rule did not go forward due to the opposition of Vox.
The ministry recalls that the new law will be retroactive to January 1 since “it will be applicable to changes of residence in force from the 2024 fiscal year itself.” One of the conditions imposed is that the beneficiary cannot be a tax resident in Spain during the five years prior to the change of location. Nor can you invest in entities domiciled in tax havens and the beneficiary cannot exercise executive or management functions or maintain an employment relationship with the entity in which they make their contributions, explains the department.
Source: www.lavanguardia.com
