Taxes on selling a business in Spain: A complete tax guide

What taxes do you pay when you sell a business in Spain?

The taxes you pay when you sell a business depend on how the transaction is structured: if you sell company shares (participaciones sociales) as an individual, you pay Spanish personal income tax (IRPF, Impuesto sobre la Renta de las Personas Físicas) on the savings income base (between 19% and 30%); if you sell assets, the taxation is more complex and involves corporate income tax (Impuesto de Sociedades), VAT (IVA) and potentially transfer tax (ITP, Impuesto de Transmisiones Patrimoniales). Understanding the difference between the two approaches is the first step towards effective tax planning.

Tax is one of the issues that most concerns business owners who are thinking of selling. And rightly so: poor planning can mean tens of thousands of euros more in tax. In this guide we break down all the tax implications of selling a business in Spain, with figures updated to 2026 and specific considerations for the Valencian Community (Comunidad Valenciana).

How is the sale of company shares taxed (individual seller)?

Selling company shares is the most common way to sell an SME in Spain. The seller transfers their shares (acciones or participaciones) to the buyer and pays IRPF on the capital gain obtained.

Calculating the capital gain

The capital gain is calculated as the difference between the transfer value (sale price) and the acquisition value (what you paid for the shares, including costs inherent to the acquisition).

Gain = Sale price – Acquisition value – Transaction costs

Deductible costs include transaction costs (notary – notario –, advice…) and other costs directly linked to the transfer.

IRPF tax rates — savings income base (2026)

The capital gain on the sale of shares is taxed in the savings income base of IRPF, with the following bands:

Illustrative example

Imagine you sell your business for €600,000. You acquired the shares for €50,000 when you set up the company and you have €30,000 in transaction costs (notary, advice…).

• Capital gain: 600,000 – 50,000 – 30,000 = €520,000
• Tax:
  • 6,000 × 19% = €1,140
  • 44,000 × 21% = €9,240
  • 150,000 × 23% = €34,500
  • 100,000 × 27% = €27,000
  • 220,000 × 30% = €66,000
• Total IRPF: €137,880
• Effective rate: 26.5%

As you can see, the effective rate stays below the maximum of 30% thanks to the progressive bands. Even so, it is a significant tax bill that is worth planning well in advance.

What about ITP on the sale of shares?

The transfer of company shares is exempt from transfer tax (ITP) in most cases. However, there is an important exception under Art. 338 of Ley 6/2023 (Spanish Securities Markets Act): if at least 50% of the company's assets consist of real estate located in Spain that is not used in a business or professional activity, and the buyer acquires control of the company (more than 50% of the shares), it is presumed, unless proven otherwise, that the aim is to avoid the tax, and the transaction may be subject to ITP at the rate applicable to transfers of real estate. It is advisable to confirm this with a tax adviser.

In the Valencian Community, the ITP rate is 9% as a general rule (since 1 June 2026). This anti-avoidance rule aims to prevent the sale of shares being used as a way to transfer real estate without paying ITP.

Tip: If your company has significant real estate on its balance sheet, consult a tax adviser before structuring the transaction.

How is the sale of assets taxed?

Instead of selling shares, some transactions are structured as an asset sale: the buyer acquires the business's assets (machinery, premises, customer portfolio, goodwill) rather than the company's shares.

Tax implications of an asset sale

• Corporate income tax (Impuesto de Sociedades): The selling company pays tax on the gain obtained on the sale of each asset at the general rate of 25%. The gain is the difference between the transfer value and the net book value of the asset.
• VAT (IVA): The transfer of business assets is subject to VAT (21% standard rate), unless the transfer falls outside the scope of VAT under Article 7.1 of the Ley del IVA (Spanish VAT Act) because an autonomous economic unit (a business that can operate on its own) is transferred.
• ITP: If the transaction is not subject to VAT because it is an autonomous economic unit and the seller is a business owner or professional, only the real estate included in the transfer is subject to ITP (Art. 7.5 of the consolidated ITPAJD Act, Real Decreto Legislativo 1/1993); in the Valencian Community, 9% as a general rule, since 1 June 2026. It is advisable to confirm this with a tax adviser.
• Municipal capital gains tax (plusvalía municipal, IIVTNU): If urban real estate is transferred, the seller must pay the Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana (tax on the increase in value of urban land), calculated using the actual method or the objective method (whichever is lower).

Shares or assets? Which suits the seller better?

In the vast majority of SME transactions, selling shares is more tax-efficient for the seller:

• Maximum tax of 30% (IRPF) compared with 25% corporate income tax + possible double taxation when distributing dividends.
• Exemption from ITP in most cases.
• Greater operational simplicity.

For the buyer, an asset purchase may be preferable because it allows tax amortisation of goodwill. This difference of interests is a common point of negotiation. At Alcara Partners we help find structures that balance the interests of both parties.

How does a holding company reduce taxes?

Using a holding company as the vehicle for holding shares is the most important tax strategy for sellers who plan ahead. The mechanism is as follows:

Exemption for significant shareholdings (Art. 21 LIS)

Under the Ley del Impuesto sobre Sociedades (LIS, Spanish Corporate Income Tax Act), if the shares in the operating company are held through a holding company, the gain on the sale may be 95% exempt from corporate income tax, provided these requirements are met:

• The holding company owns at least 5% of the operating company.
• The shares have been held for at least 1 year.
• The operating company carries on an economic activity (it is not merely an asset-holding company).

Tax impact

• Without a holding company: You sell as an individual → taxed at 19%-30% under IRPF.
• With a holding company: The holding company sells → gain 95% exempt → only 5% of the gain is taxed at 25% = effective rate of 1.25%.

The difference is enormous. In the previous example (gain of €520,000):

• Without a holding company: €137,880 in tax.
• With a holding company: 520,000 × 5% × 25% = €6,500 in corporate income tax (as long as the money stays in the holding company).

But there is a crucial nuance: The money stays in the holding company. If you want to use it as an individual, you will pay tax when it is distributed as dividends (19%-30%). The real advantage is tax deferral and the possibility of reinvesting from the holding company without paying tax.

When does it make sense to set up a holding company?

The holding company must exist before the sale, ideally at least 1-2 years in advance. Transferring the shares to a holding company just before selling may be challenged by the Spanish tax authorities (Hacienda) as a transaction without a valid economic reason (conflict in the application of tax rules, conflicto en la aplicación de la norma).

If you are planning to sell your business in the next 2-3 years, consult a tax adviser about whether it makes sense to restructure how you hold your shares.

What tax considerations apply specifically in the Valencian Community?

The Valencian Community has regulatory powers over certain taxes ceded by the State that may affect the transaction:

• ITP: In the Valencian Community, the rate is 9% as a general rule (since 1 June 2026). Relevant if the transaction is subject to ITP.
• Inheritance and gift tax (Impuesto de Sucesiones y Donaciones): If the transfer is structured as a gift (for example, in a family succession), the Valencian Community has its own tax credits (bonificaciones). Since 2023, the Valencian Community has applied a 99% tax credit on transfers between parents and children (Art. 12 bis of the Valencian Ley 13/1997), albeit with specific requirements; it is advisable to confirm this with a tax adviser.
• Municipal capital gains tax (plusvalía municipal): The city councils of Valencia, Alicante and Castellón apply their own coefficients. Following the reform of the tax, the taxpayer can choose between the objective method and the actual method, paying tax on whichever is lower.

How should you plan the tax on the sale of your business?

Tax planning is not evasion — it is a duty of diligence towards your wealth. These are the most relevant legitimate strategies:

1. Plan ahead (2-3 years)

Most legitimate tax strategies need time. A corporate restructuring carried out the month before the sale will be challenged by Hacienda.

2. Consider the holding structure

If the expected gain is significant (more than €200,000), the potential tax saving of a holding company justifies professional advice.

3. Structure the payments (earn-out)

If part of the price depends on future results (earn-out) and is received in successive payments over a period of more than one year, you can choose to allocate the gain as the payments fall due (instalment transactions, Art. 14.2.d of the Ley del IRPF, the Spanish Personal Income Tax Act); it is advisable to confirm this with a tax adviser. This can allow you to spread the gain over several financial years and make use of the lower IRPF bands in each one.

4. Offset capital losses

If you have capital losses still to be offset (for example, from earlier investments), they can reduce the taxable base of the gain on the sale of the business.

5. Optimise deductible costs

All costs directly linked to the transaction (notary, advice…) reduce the capital gain. Make sure you document and declare them correctly.

6. Check the treatment of your main home

If you reinvest the gain from the sale in buying your main home, there is no direct exemption. But there are exemptions for people over 65 who transfer their main home, and for people over 65 who reinvest in life annuities (rentas vitalicias).

When do I have to pay the taxes?

When you pay depends on the type of tax:

• IRPF: It is declared in the income tax return for the year in which the transfer takes place (June of the following year). If the gain is large, it is advisable to set aside the necessary cash.
• Corporate income tax: It is declared for the company's financial year in which the sale takes place (July of the following year for companies whose financial year is the calendar year).
• ITP: 30 working days from the date of the transfer.
• Municipal capital gains tax (plusvalía municipal): 30 working days from the transfer.

If you need guidance on the whole sale process beyond tax, see our page on how to sell your business or our guide to the due diligence process.

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Frequently asked questions

How much tax do you pay when you sell a business in Spain?

The taxation depends on the structure of the transaction. If you sell shares as an individual, you pay between 19% and 30% on the capital gain (IRPF, savings income base). It depends on the amount of the gain: with the 2026 scale, the effective rate is around 22% for a gain of €200,000, 26.5% for €520,000 and 28% for €1,000,000.

Is it better to sell shares or assets?

For the seller, selling shares is generally more tax-efficient: maximum tax of 30% under IRPF and exemption from ITP. An asset sale involves corporate income tax (25%), possibly VAT and, if there is real estate, municipal capital gains tax (plusvalía municipal).

What is a holding company and how does it reduce taxes?

A holding company is a company whose main purpose is to own shares in other companies. If the holding company sells the shares of the operating company while meeting certain requirements (5% shareholding, held for 1 year), the gain is 95% exempt, with an effective rate of 1.25%.

Can I set up a holding company just before selling?

Technically you can, but Hacienda may challenge the transaction if it has no valid economic reason beyond the tax saving. The recommended approach is to set up the structure at least 1-2 years in advance and for the holding company to have real economic substance.

What taxes does the buyer pay?

The buyer generally pays no direct taxes on the acquisition of shares (ITP exemption). If they buy assets, they may have to pay VAT (which they then deduct) or, if the transaction is not subject to VAT, ITP on the real estate included (Art. 7.5 of the consolidated ITPAJD Act). The buyer's main costs are notary, registry and advice.

Does the sale of my business affect my income tax return?

Yes. The capital gain is declared in the savings income base of your IRPF for the year in which the sale takes place. It is advisable to set aside the cash needed to make the payment, which falls due in June of the following year.

Are there tax exemptions for people over 65?

There is no specific exemption for the sale of shares by people over 65. However, if you reinvest the gain in a life annuity (renta vitalicia, up to €240,000) within 6 months, that part of the gain is exempt. Consult a tax adviser about the specific requirements.

How is an earn-out taxed?

An earn-out (part of the price that depends on future results) can be taxed as the payments fall due, rather than entirely in the year of the sale, if it meets the requirements for instalment transactions (Art. 14.2.d of the Ley del IRPF: successive payments over a period of more than one year); it is advisable to confirm this with a tax adviser. This allows tax to be deferred and, in some cases, the gain to be spread over several financial years to make use of lower IRPF bands.

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References

[1] Ley 35/2006, de 28 de noviembre, del Impuesto sobre la Renta de las Personas Físicas (Personal Income Tax Act). Art. 14.2.d (instalment transactions) and Art. 33-39 (capital gains). BOE.

[2] Ley 27/2014, de 27 de noviembre, del Impuesto sobre Sociedades (Corporate Income Tax Act). Art. 21 (exemption for significant shareholdings). BOE.

[3] Ley 6/2023, de 17 de marzo, de los Mercados de Valores y de los Servicios de Inversión (Securities Markets and Investment Services Act). Art. 338.

[4] Agencia Tributaria (Spanish Tax Agency). "Manual práctico de Renta 2025. Ganancias y pérdidas patrimoniales." (Practical income tax manual: capital gains and losses) agenciatributaria.es.

[5] Generalitat Valenciana (Valencian regional government). "Tipos impositivos ITP y AJD en la Comunitat Valenciana." (ITP and AJD tax rates in the Valencian Community) gva.es, 2026.

[6] Dirección General de Tributos (Directorate-General for Taxation). Binding rulings on corporate restructuring and conflict in the application of tax rules. DGT, 2024-2025.

[7] Real Decreto Legislativo 1/1993, de 24 de septiembre, por el que se aprueba el texto refundido de la Ley del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados (consolidated Transfer Tax and Stamp Duty Act). Art. 7.5. BOE.

[8] Ley 6/2023, de 22 de noviembre, de la Generalitat, de modificación de la Ley 13/1997, de 23 de diciembre, por la que se regula el tramo autonómico del Impuesto sobre la Renta de las Personas Físicas y restantes tributos cedidos, por lo que se refiere al Impuesto de Sucesiones y Donaciones (Valencian act amending the regional rules on inheritance and gift tax). Art. 2 (Art. 12 bis of Ley 13/1997). DOGV, 2023.