Special Tax Regimes (SMEs, Startups)

Special tax regimes for SMEs and startups are fiscal frameworks designed to support the growth of small and medium-sized enterprises through tax reductions, administrative simplification, or incentives for investment and innovation. Below is a general overview (specific details may vary by country):

1. Special Regime for SMEs

This regime aims to reduce the tax burden and simplify procedures for small and medium-sized businesses.

Common benefits:

• Reduced income tax rates.

• Simplified tax returns or minimal accounting records.

• Deferred or installment-based tax payments.

• Exemptions or reductions on local/municipal taxes.

Typical requirements:

• Annual revenue limits (varies by country).

• Maximum number of employees.

• Must not be part of a larger corporate group.

• Must engage in eligible economic activities.

2. Special Regime for Startups (Innovative Companies)

These regimes are designed to promote innovation, digitalization, and tech-based entrepreneurship.

Typical benefits:

• Additional deductions for R&D and innovation expenses.

• Tax incentives for angel investors (deduction for investments in startups).

• Partial or total income tax exemption during the initial years.

• Priority access to public funding or seed capital.

• Flexibility in early-stage hiring regulations.

Common requirements:

• Recently created company (e.g., less than 5 years old).

• Must demonstrate a technological innovation component (often certified by an authority).

• Revenue or asset limits.

• Profits typically cannot be distributed in the early years.

Country Examples (Summary):

• Spain: 2022 Startup Law – reduced corporate tax rate (15%) and investor tax benefits.

• Mexico: “RESICO” (Simplified Trust Regime) for individuals and businesses below a certain income threshold.

• Colombia: Entrepreneurship Law – reduced tax rates and temporary exemptions for new businesses.

• Chile: ProSME Regime – lower corporate tax rates and simplified accounting.

• Peru: MYPE Tax Regime – for companies with annual revenue below 1,700 UIT (tax units).

Andrys Mañon 01.