What is tax lease and how does it work?
The Spanish tax system offers mechanisms that allow the transformation of deductions for innovation into direct financing. Among them, the tax lease stands out for its efficient and secure structure.
This model allows innovative companies to obtain immediate liquidity by assigning their tax deductions to third party investors. In return, the investors legally reduce their tax burden.
In this article, ECIJA Advisory analyses how tax leasing works, who can apply it and what advantages it offers for business projects linked to research and innovation.
What exactly is a tax lease?
The so-called tax lease, also known as technological fiscal sponsorship, consists of a tax mechanism that allows a company to transfer to a third party the rights of deduction generated by research, development and innovation activities. Through this transfer, the company carrying out the project receives direct financing, while the investor can apply these deductions in its corporate income tax return.
This tool is normally articulated through an Economic Interest Grouping (EIG), which functions as an intermediate legal figure to formalise the operation. However, in autonomous communities such as the Basque Country and Navarre, there are alternatives that allow the EIG to be dispensed with in certain cases.
The main purpose of this structure is to transform tax benefits into immediate liquidity, avoiding recourse to traditional bank financing and thus favouring the start-up of innovative projects.
How does tax lease work in practice?
The tax lease process is articulated in several phases that must be carefully followed to ensure its legal and fiscal viability:
The company generates an R&D&I project with deductible costs.
The tax deductions generated are quantified.
An EIG is set up which subcontracts the company to carry out the project.
The investor provides capital to the EIG.
The company invoices the EIG for the work and the EIG applies the tax deductions.
In addition, call/repurchase options are agreed on the EIG's shares, allowing the company to regain control over the project's results at the end of the cycle.
This mechanism allows the investor to reduce its tax burden and the company to access funds without resorting to bank loans.
What are the requirements to apply for a tax lease?
The following are the basic requirements to participate in a tax lease operation:
Key tax lease requirements
Requirement | Developer | Investor or sponsor |
Tax obligation | Certified R&D&I project | Positive IS or IRPF tax liability |
Financial capacity | Execute the part not financed by the investor | Contribution of 30-35 % of the project cost |
Structural vehicle | Participation in an EIG (if applicable) | Participation in an EIG |
Associated contracts | Repurchase options, assignment of receivables | Assignment of receivables, tax application |
For the investor:
Be a taxpayer liable for corporate income tax (or personal income tax if an individual with economic activity).
Have sufficient tax liability to apply the deductions assigned.
For the company:
To prove that the project complies with R&D&I requirements.
To have ex ante and ex post certificates.
Have operational capacity to execute the project not covered by the EIG.
Structural requirements:
Constitution of an EIG (except in foral territories with special regimes).
Agreeing repurchase clauses that ensure the recovery of control of the project.
Advantages of the tax lease for the innovative company
The company developing the R&D&I project obtains several advantages by using this system:
Immediate liquidity without bank debt.
Taking advantage of unabsorbed tax deductions.
Conservation of equity capital for other investments.
In addition, this mechanism allows an economic return that can reach 40-50% of the cost of the project, depending on the design of the operation and the coefficients applied.
Advantages of tax leasing for the investor or technological sponsor
The investor who participates also obtains significant fiscal and financial benefits:
Effective reduction in Corporate Tax thanks to the application of deductions.
Higher tax returns than other traditional investments.
Possibility of acquiring assets or shares at residual value.
In addition, many of these operations have official certifications that guarantee their legal security.
Regional specificities: Navarre and the Basque Country
In Navarre and the Basque Country, simplified mechanisms are applied that avoid the creation of an EIG. Instead, return on investment ratios are used, which streamlines the process.
For example, if 83,333 € are contributed, tax rights are obtained for 100,000 € (coefficient 1.2). This simplification has boosted the use of tax leasing in these territories.
It is important to take into account the location of the project in order to structure the operation correctly according to regional regulations.
Differences with traditional monetisation
Tax leasing has a number of advantages over conventional monetisation of tax deductions. The main differences are summarised below:
Operational speed: it allows liquidity to be obtained in less time, shortening financing periods.
Greater tax leverage: even if the company does not have a positive tax liability, it can still benefit from the incentive.
More robust legal structure: legal vehicles such as the EIG are involved, providing greater security to the operation.
Third-party intervention: an investor is incorporated who assumes part of the risk and provides capital.
Territorial flexibility: in Navarre and the Basque Country it is applied with simplified procedures and without an EIG.
Unlike the conventional monetisation of tax deductions, the tax lease allows access to the tax benefit without waiting for a positive quota. It also offers greater agility, as it reduces the time needed to obtain liquidity.
However, it requires a more complex contractual structure and the involvement of specialised advisors to ensure compliance and avoid tax risks.
Tax lease: clear and effective advice with ECIJA Advisory
ECIJA Advisory has a multidisciplinary team that helps to structure tax lease transactions safely and efficiently. We advise both innovative companies and investors, ensuring that each transaction complies with legal and tax requirements.
Our objective is to facilitate access to innovation financing through the efficient use of available tax incentives.
If your organisation would like to explore this avenue, contact ECIJA Advisory and together we will analyse the best way to apply the tax lease to your case.
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Frequently asked questions about tax leasing
Yes, although it is not common. If the parties agree to waive - or modify the agreement - the contract should be reviewed and ensure that there are no tax consequences or penalties for non-compliance.
It does not automatically commit deductions, as long as the expenses are properly justified and executed. The main risk lies in the investor's ability to absorb these deductions.
Depends on the structurer. In many cases, the fees are borne by the investor or the structurer, so as not to create additional financial burden for the innovative company.
No formal prior authorisation is required, but the operation must be in strict compliance with regulations. In case of inspection, the tax authorities may question the structure if it is not properly documented.
The cost of the R&D&I project, the percentage of legally deductible expenditure and the coefficient applicable in the structured operation are analysed. The valuation must be technical and financial.
Yes, it is not reserved only for large corporations, as long as the SME carries out an R&D&I project with the legal requirements and can structure the assignment appropriately.
These clauses protect the innovative company from regaining control of the project once the cycle has been completed. They establish conditions and deadlines for reacquiring the shares or rights in the EIG.