Spain's PP disappoints on economic measures for self-employed and SMEs

Spain's PP has not announced general cuts to Corporate Tax or to the taxation of dividends, interest and capital gains, and on personal income tax (IRPF) it promises a reduction without yet publishing rates or brackets. The concrete measures for the self-employed and SMEs are the VAT exemption up to 85,000 euros, zero social security contributions for new registrations and hiring rebates.

There is a way to check whether a party takes a tax cut seriously: it publishes the rate, the threshold and the date. With the economic proposals the PP has put forward for the general election on **29 November 2026**, that test yields a mixed result. There are concrete measures for the self-employed and small businesses, many of them focused on those starting out. And there are, on the other hand, notable silences on the levies that weigh most on a company's profits: Corporate Tax and the taxation of savings.

## VAT exemption up to 85,000 euros and zero contributions for new self-employed

The most eye-catching proposal for self-employment is a VAT franchise scheme: self-employed workers invoicing up to **85,000 euros a year** would not have to charge or settle VAT on transactions covered by the scheme. There is a trade-off, and it is worth stating: they would not be able to deduct the VAT on their purchases either. For a plumber who buys materials every day, that may or may not pay off, depending on the trade.

The second pillar is the zero contribution. New self-employed workers would be exempt from social security contributions during the first year, with the possibility of extending it to a second year if certain requirements are met. For new registrations by those under **35**, the announcement speaks of two years of zero contributions. These are incentives to register, not a cut in the contribution system for those who have been paying in for years.

Added to this are the reduction of tax obligations (from four quarterly returns to two, or one for new self-employed), adjusted contributions for those earning less than **25% of the minimum wage**, proportional contributions for those in multiple employment and the option to defer up to three contributions a year. Also announced is an exemption from contributions during the 24 months after returning from maternity or paternity leave, and rebates for sick leave in serious illness cases, with exemption from day one for self-employed workers without employees in the stipulated scenarios.

## Hiring rebates and free depreciation

For SMEs and limited companies, the package relies mainly on investment incentives: expanding free depreciation and certain deductions for business investments, with special attention to technology, digital tools and artificial intelligence systems. This is a classic way to move taxation without touching the nominal rate. The rate stays as it is; what changes is how much can be deducted before calculating it.

On employment, the first worker hired by a self-employed person would receive a **100%** rebate on employer social security contributions for 12 months, extendable by another 6 for certain groups. The second employee, **50%** for 12 months. Apprenticeship contracts would be rebated at 100% for between 6 and 12 months in certain cases involving under-35s or over-52s. These are hiring measures, not a general cut in employer social security contributions: there is no quantified reduction for all companies and all their employees.

There is also a chapter on administrative simplification (fewer licences and barriers to operating between Spain's autonomous regions), easier access to public procurement, improvements to second-chance procedures and a cut in the energy VAT from **21% to 10%**, along with the abolition of the tax on electricity generation. Rural entrepreneurs under 40 have their own package: a contribution of **50 euros a month** for three years, a 50% IRPF reduction in the first two years, an incorporation bonus of up to **15,000 euros** and public guarantees of up to 80% of the investment. These are special conditions, not a general benefit.

## IRPF: a commitment without a table, and Corporate Tax untouched

On IRPF there is intent but no numbers. The PP has announced updating the state tax scale to compensate for inflation, doubling the minimum for dependants, improving certain deductions, exempting minimum-wage earners from IRPF and an additional reduction for new rural entrepreneurs. What has not been published is a complete new scale with percentages for all brackets. Without that table, it is impossible to calculate how much a given self-employed worker would save based on their profits. The promise exists; the figure does not.

On Corporate Tax the silence is more emphatic. No general, quantified reduction of the rate has been announced for this election. The party proposes improving depreciation, deductions and investment incentives, but has not set a new general rate of 15%, 20% or any other percentage for all companies. It is worth not confusing what is already in force with what is promised: the general rate stands at **25%**, small companies pay **23% in 2026** and micro-enterprises with turnover below 1 million euros pay **19%** on the first 50,000 euros of taxable base and **21%** on the rest that same year. Newly created companies have a 15% rate. None of that is a new electoral promise.

## Dividends, interest and capital gains still see no announced cut

The taxation of savings directly affects shareholders of SMEs who distribute profits. Here too there is no concrete announced cut. The current scale for tax residents in Spain runs from **19%** up to 6,000 euros, to **21%** between 6,000 and 50,000, to **23%** between 50,000 and 200,000, to **27%** between 200,000 and 300,000 and to **30%** above that figure. These are marginal rates applied by brackets, and the PP has not presented a new scale to reduce them.

Nor is there an updated and complete electoral commitment on Wealth Tax, large fortunes, and Inheritance and Gift Tax. The party defended abolishing the tax on large fortunes in previous programmes and introduced parliamentary initiatives to eliminate Inheritance and Gift Tax, but that is a historical position, not a confirmed measure for this election. On general VAT, no cut from 21% has been announced for all products and services, only specific proposals for low-turnover self-employed workers, basic foods and energy. Municipal capital gains tax and the taxation of asset-holding companies and holdings also have no concreted general reform.

The takeaway is uncomfortable for anyone expecting a broad adjustment: there is relief for the self-employed person starting out and for those investing in technology, but not, for now, in the tax that taxes a company's profits or in the one that taxes the dividend through which those profits reach the shareholder's pocket. Announcing that taxes will be cut is not the same as presenting rates, thresholds and dates. All these proposals would also need the corresponding legislation to be approved before taking effect, and this material reflects announcements and public documents, not a definitive electoral programme. Before making any tax or corporate decision based on these measures, it is advisable to consult an adviser.