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Practical Handbook for Companies 2021

Deduction requirements and amount

Taxpayers will be able to apply the following deductions for job creation whenever they hire through the indefinite-term employment contract to support entrepreneurs defined in article 4 of Law 3/2012, of 6 July, on Urgent Measures for the Reform of the Labour Market:

  • Job creation by hiring people under 30 years of age:3,000 euros for the hiring of the first worker through an open-ended contract to support entrepreneurs, who is under 30 years of age.

    This deduction is only applicable for those entities that do not employ any staff.

  • Job creation by hiring unemployed people on unemployment benefit:50 per cent of the lesser of the following amounts:

    • The amount of unemployment benefit the worker has yet to receive when he/she is hired.

    • The amount corresponding to twelve monthly payments of the unemployment benefit he/she was entitled to.

    The application of this second deduction, which does not exclude the application of the first deduction, is subject to the following requirements :

    • Have a staff of less than 50 workers at the time of recruitment of unemployed persons in receipt of contributory unemployment benefit (regulated by the General Law on Social Security).

    • The deduction will be applied to contracts made in the tax period up to a maximum of 50 employees .

    • In the twelve months following the start of the employment relationship, for each worker there must be an increase in the total average workforce of the entity by at least one unit with respect to the previous twelve months.

    • The hired worker must have received the unemployment benefit for at least three months prior to the start of the employment relationship.For these purposes, the worker shall provide the organization with a State Employment Public Service certificate.

Amounts not deducted due to insufficient tax liability may be applied in the tax assessments for tax periods ending in the immediate and subsequent 15 years.