An exit, that is, the sale of a startup through the sale of shares or equity, is usually one of the most important milestones in an entrepreneur’s or investor’s journey. It can represent the culmination of years of effort, risk, and dedication. However, the final amount that ends up in your pocket after taxes can differ dramatically from what was initially expected.
The difference between a well-planned exit and an improvised one is not only in the millions billed, but also in the tax efficiency with which the operation is structured. Two founders selling for the same amount can end up with very different net wealth.
Common mistakes in an exit
In practice, most founders focus their attention on the commercial side of the operation and relegate tax matters to a secondary role. This oversight can be very costly.
Typical mistakes can include:
- Failing to anticipate the tax burden: assuming that the net gain will equal the gross, without considering tax brackets.
- Not structuring with corporate vehicles: missing the opportunity to defer or reduce taxation through holding companies.
- Ignoring tax incentives: not taking advantage of deductions or exemptions that were available from the start.
- Changing residence without a strategy: unintentionally triggering the Exit Tax when moving out of Spain.
- Looking for last-minute solutions: trying to modify structures days before the sale, when it is already too late or risky.
A frequent example is a founder who, upon receiving a purchase offer, decides to set up a holding company urgently. The Spanish Tax Agency usually rejects these opportunistic moves, and the tax benefits are lost.
Key lesson: tax planning should start from the initial shareholder agreement. Anticipating exit scenarios and setting strategies early is the best defense against costly mistakes.
Individual vs. holding company
One of the most decisive points is whether the founder sells as an individual or through a holding company.
Selling as an individual
In Spain, capital gains are taxed under the IRPF (savings base) with a progressive scheme:
- Up to €6,000 → 19%
- From €6,000 to €50,000 → 21%
- From €50,000 to €200,000 → 23%
- Above €200,000 → 27–30% (depending on the autonomous community and current regulations).
Example:
A founder sells shares with a gain of €1,000,000. The marginal rate will be 27%. Result: more than €250,000 in taxes.
Selling through a holding company
If the sale is made through a holding company that meets the requirements of Article 21 of the Corporate Tax Law, a 95% exemption on the capital gain applies.
This means that only 5% of the gain is taxed, at the general rate of 25%. In practice:
- Gain = €1,000,000
- Taxable base = €50,000
- Tax = €12,500
- Effective rate = 1.25%
Conclusion: selling through a holding company can mean saving hundreds of thousands of euros, with the added benefit of being able to reinvest from the company without immediate tax costs.
Holding companies and tax deferral
A holding company is an entity whose main activity is holding shares in other companies. To access the tax benefits, it must:
- Own at least 5% of the shares.
- Have held that participation for more than one year before the sale.
Key advantages
- Tax deferral: the capital remains in the company without passing to personal IRPF.
- Efficient reinvestment: new assets can be acquired, invested in other businesses, or diversified without paying immediate taxes.
- Flexibility in dividends: payouts to individuals can be staggered to optimize IRPF.
Warnings
- The holding must have economic substance: real structure, decision-making, own resources. A “paper” holding may be considered abusive.
- It is possible to create a holding under the tax neutrality regime (share swap), but it must be properly notified and comply with legal requirements.
Tax incentives for investors
Spain has introduced measures to encourage investment in startups and newly created companies.
IRPF deductions
- 50% of the investment in tax credits.
- Maximum annual base: €100,000.
- Applicable to both individual investors and business angels.
Requirements
- Maintain the investment for at least 3 years.
- Do not exceed 40% direct or indirect ownership.
- The company cannot be listed on organized markets.
- Declare the transaction using AEAT Form 165.
Reinvestment of gains
If the investor sells shares and reinvests in another startup, an exemption on the gain can be applied. This allows profits to be transferred to a new investment without paying taxes at that moment.
Temptation of expatriation: Exit Tax
Many founders consider moving to jurisdictions with lower tax pressure before executing an exit. However, Spain applies the Exit Tax, which taxes latent capital gains on shares when someone ceases to be a tax resident.
Exceptions
- Moving to the EU/EEA: a deferral of up to 10 years can be requested.
- If returning to Spain before that period, the latent gain may still be taxed.
Risks
- The Spanish Tax Agency may consider a change of residence motivated solely by tax reasons as artificial.
- Poorly designed planning can result in immediate taxes and penalties.
Conclusion
- An exit is not improvised: it is designed from the first shareholder agreement.
- Good tax planning can be the difference between great success and a missed opportunity.
- Use holdings strategically.
- Anticipate taxation from the start.
- Take advantage of available legal incentives.
- Avoid last-minute improvised moves.
In short: what matters is not only how much you sell for, but how much you keep after taxes.
Are you considering an exit or divestment?
Write to us at contacto@metricson.com for a personalized consultation and more precise information.
Artículo written by:
Tax Team
About Metricson
Metricson is a pioneering firm in legal services for innovative and technology companies, where you will find experts in all the necessary areas to advise you on tax matters as well as any legal aspect related to your company.