Tax Advisory in Madrid: Your Fiscal Partner in the Spanish Capital

Tax advisory in Madrid operates within Spain's most active tax enforcement jurisdiction, where the AEAT's Special Delegation for Madrid and the Central Large Taxpayer Delegation (DCGC — covering entities with turnover above EUR 100 million) conduct technically intensive audit proceedings for companies and individuals domiciled in the capital. The Comunidad de Madrid (CAM) offers some of the most favourable personal tax conditions in Spain: a 100% Wealth Tax (IP) exemption for residents, a 99% Inheritance and Gift Tax (ISD) reduction on transfers between direct descendants, and competitive regional IRPF rates — advantages that require careful residency and asset structuring to capture correctly given the national Solidarity Tax on Large Fortunes (ITSGF, applicable above EUR 3 million).

Why tax advisory in Madrid requires specific sector expertise

Madrid is not an ordinary tax jurisdiction. The AEAT Special Delegation for Madrid and, for the most significant taxpayers, the Central Large Taxpayer Delegation, conduct audit proceedings with a technical intensity and sophistication unmatched elsewhere in the country. If your company is headquartered in Madrid, operates in the capital markets, belongs to a multinational group, or holds a significant wealth portfolio, you need tax advisers with deep expertise in this environment.

Tax planning in Madrid also demands knowledge of the Comunidad de Madrid’s specific incentives: the 100% Wealth Tax exemption — partially offset by the State’s Solidarity Tax on Large Fortunes, though partially recoverable through residency planning — and the 99% ISD reductions between direct descendants, which make Madrid one of Spain’s most tax-efficient regions for personal and succession planning.

Our Madrid tax team: full-service coverage from planning to defence

Our team at the Madrid office combines large-account specialists and international group experts with professionals dedicated to personal wealth planning and mid-market business advisory. This combination means we can serve a US group’s Spanish subsidiary with complex transfer pricing needs with the same depth as a Madrid entrepreneur seeking to optimise their company’s remuneration policy and succession planning.

For corporate transactions, we work alongside our mergers and acquisitions and commercial law teams to ensure every deal is designed with tax efficiency built in from the outset. A well-designed acquisition structure can mean several percentage points of difference in the final return on investment.

Comunidad de Madrid fiscal incentives you cannot afford to miss

The CAM offers some of the most significant personal tax advantages in Spain’s tax system:

• Wealth Tax: 100% exemption for Comunidad de Madrid residents (the Solidarity Tax on Large Fortunes limits this advantage for very large portfolios, but residency planning remains decisive).
• Inheritance and Gift Tax: 99% reduction on transfers between parents and children, making Madrid the country’s most favourable region for succession planning.
• Regional IRPF deductions: the CAM applies additional deductions on the regional IRPF tranche for investments in startups, main residence rental, large families, and other items.

What our Madrid tax advisory service includes

From our Madrid office we provide the full tax advisory service: monthly and annual tax compliance (IS, VAT, IRPF, IP, ISD), strategic planning, audit defence, transfer pricing for international groups, M&A tax advisory, corporate restructurings, and personal and succession wealth planning.

For companies with international tax exposure — subsidiaries abroad, foreign shareholders, cross-border royalties — our team has experience applying double taxation treaties, the parent-subsidiary directive, and OECD/BEPS standards.

Book a consultation with our Madrid tax team and receive a diagnostic of your current tax position with identification of the main optimisation opportunities. The initial meeting is at no cost and without commitment.

Contact us through our Madrid office or request an appointment directly.

Madrid as Spain’s principal tax centre

The Comunidad de Madrid accounts for more than 20% of Spain’s total GDP, hosts the headquarters of more than 70% of IBEX-35 listed companies, and concentrates the highest density of internationally active businesses in the Iberian Peninsula. This economic weight translates directly into tax complexity: Madrid-based entities face larger-scale AEAT audit activity, more sophisticated transfer pricing scrutiny, and greater regulatory pressure than companies operating elsewhere in Spain.

For international tax matters, Madrid is particularly significant. Double taxation treaty applications, Directive on Administrative Cooperation (DAC6) reporting obligations, and Base Erosion and Profit Shifting (BEPS) compliance for Spanish operations of multinational groups are all handled through Madrid-based advisers in most cases. Our team has direct experience advising US, UK, French, and German group subsidiaries on these requirements.

Corporate tax planning specific to Madrid-based entities

Corporate tax planning in Madrid demands familiarity with several regime-specific features that do not apply in the same way elsewhere:

• Consolidated tax group regime: Madrid companies belonging to multinational groups frequently elect to form or integrate into a Spanish consolidated tax group, which allows loss offsetting and intra-group transfers at book value. Structuring this correctly requires detailed analysis of the shareholding chain and intercompany transactions.
• Patent box and IP regimes: The Spanish patent box (Article 23 LIS) allows a 60% reduction on income derived from qualifying intangible assets. Madrid-based R&D operations or IP holding structures frequently have access to this benefit if properly documented.
• Startup Law incentives: Under the 2023 Startup Law (Ley 28/2022), qualifying newly incorporated entities pay corporate tax at a reduced 15% rate for the first four profitable years. Madrid is Spain’s principal startup ecosystem, and our team advises founders on qualifying for and maintaining this benefit.
• Employee stock options: The Startup Law also improved the fiscal treatment of employee equity awards. For Madrid-based technology companies, this has become a critical retention and incentive tool with specific compliance requirements.

Transfer pricing in Madrid: AEAT’s primary scrutiny area

Transfer pricing remains the most active area of AEAT inspection activity for Madrid-based multinational groups. The Central Large Taxpayer Delegation has dedicated transfer pricing specialists and increasingly applies econometric and functional analyses that require equivalently rigorous documentation from taxpayers.

Our Madrid transfer pricing team prepares master files (MF), local files (LF), and Country-by-Country Reports (CbCR) to OECD standards. We also advise on Advance Pricing Agreements (APAs) with the AEAT where predictability is essential, and defend existing positions during audit proceedings.

Wealth and succession planning in the Comunidad de Madrid

The CAM’s 100% Wealth Tax (IP) exemption and 99% Inheritance and Gift Tax (ISD) reductions are powerful planning tools — but they require careful implementation. For Madrid residents, the key planning elements include:

• Residency confirmation: establishing and maintaining fiscal residency in the CAM is a prerequisite for the exemptions. For high-net-worth individuals with multiple properties or frequent travel, this requires proper documentation.
• Solidarity Tax interaction: the national Solidarity Tax on Large Fortunes (ITSGF) applies to net wealth above EUR 3 million and partially limits the CAM IP exemption. Residency planning and asset structuring can reduce ITSGF exposure significantly.
• ISD planning for business owners: transferring family business assets to the next generation in a tax-efficient manner requires combining the CAM ISD reductions with the business assets exemption (empresa familiar), which has strict operational requirements.

Our succession planning and family office teams work alongside our Madrid tax specialists on these mandates.

Integration with the Madrid legal ecosystem

Tax planning cannot be separated from legal structure. Our Madrid team works in close coordination with our commercial law and M&A practices to ensure that corporate reorganisations, share deals, and holding structures are simultaneously legally sound and fiscally optimal. In complex transactions involving real estate, intellectual property, or regulated activities, multi-disciplinary coordination is not optional — it is the only way to deliver genuinely sound advice.

Contact our Madrid office for an initial diagnostic meeting — no charge, no commitment.