The strategic economic areas with the greatest fiscal tax incentives in Navarra

  • Navarra provides very beneficial tax treatment for such strategic sectors in a 21st century economy as the audiovisual sector, the development of green hydrogen and self-consumption facilities.
  • It also favours the establishment in its territory of entrepreneurial start-ups and, above all, those that provide a degree of innovation that reinforces the work of sustainable specialisation contained in its S4 Strategy.

1. 15 % tax deduction on investments related to sustainability and the circular economy

“GreenH2CATUdela”, “Nordex Electrolyzer”, “Valle H2V Navarra”… The projects linked to the development of green hydrogen – as a sustainable and environmentally neutral energy source – to be developed in Navarra have been steadily increasing for some time now. In this sense, several factors are driving these investments. On the one hand, the experience of a renewable industry in the region that was a pioneer in the implementation of wind power. On the other, the talent of professionals trained in the region’s two university centres. However, over and above these two driving forces, one very important element stands out, and that is the ambitious fiscal commitment that the Navarran authorities have made to green hydrogen. Thus, the latest legislation approved last December provides that investments in facilities and fixed assets for sustainable development and environmental improvement projects linked to green hydrogen will be eligible for tax discounts of between of up to 15 %. In addition, green hydrogen has been incorporated as a renewable source within the deduction chapter for investments in renewable energy installations, so that companies will be able to deduct up to 30% if they replace a natural gas installation.

2. Tax reduction of up to 35 % for shared energy self-consumption

Navarra’s energy self-consumption register reached 99 MW of installed capacity last January, which, compared to the 31 in 2020, represents an exponential increase of 219 % in just a couple of years. Furthermore, of the amount recorded in the first month of this year, 87 are of solar origin and 50 are concentrated in industry, the sector that has been most involved in this new energy generation system. Undoubtedly, the increase in the price of fossil fuels caused, among other reasons, by the Russian invasion of Ukraine is at the origin of this movement. But it has also been helped by other factors. For example, the surface right for energy communities reserved by the Foral Law on Climate Change or the simplification of administrative procedures introduced by the Law on Urgent Measures motivated by the conflict generated in Eastern Europe a year ago. And, above all, fiscal aid that adds an additional 5% to the 30% discount contemplated in the implementation of this type of installations that are committed to the generation and distribution of green energy for shared self-consumption projects or energy communities. In this sense, it is a clear improvement on the deduction provided for in the 2023 tax modification, of which it forms part. Thus, Navarra’s deductions for R&D&I are the highest in Spain, 15% higher than other leading regions such as the Basque Country and 10% higher than the Common Territory.


3. Boosting entrepreneurship: Increased tax deductions and financing facilities for innovative entrepreneurs

The Government of Navarra recently introduced an Additional Provision in the Foral Law on Corporate Income Tax aimed at providing tax relief to those entrepreneurs or entities that, during their first financial years, carry out an activity linked to the Smart Specialisation Strategy (S4) being developed by the region. Start-ups linked to sectors such as the automotive and mechatronics industries, the food chain, renewable energies, health, tourism, and cultural and creative industries can therefore benefit from this measure. All of them will be able to obtain deductions of up to 15% on the investments made and refunds of up to 200,000 euros in R&D projects when there is no positive quota.

In turn, start-up investors, so necessary to generate liquidity in the first years of activity, will be able to deduct up to 25% for the purchase of shares in an entrepreneurial company with an investment limit of 50,000 euros. And if the investment is made in innovative companies, up to 35% may be deducted, with a maximum limit of 100,000 euros. The aim is to facilitate the implementation of start-ups that stand out for providing added value linked to R&D and, at the same time, that reinforce the levels of competitiveness of Navarra as well as the generation of wealth and, especially, highly qualified employment. 

4. Navarra: land of cinema with a 35% tax discount

Navarra now has a highly competitive ecosystem that places it as a relevant player in the Spanish audiovisual industry. The achievement of this milestone has not been due to chance or luck, but has been the result of two key decisions. On the one hand, the strategic reflection process carried out in 2015, which allowed this territory to anticipate such commonplace phenomena as the digitalisation of content or new consumption habits and formats such as on-demand television.

At the same time, a close, agile and fluid public-private collaboration was established that facilitated the birth and consolidation of the Audiovisual Cluster of Navarra (CLAVNA), which currently brings together a large group of 40 local companies.

To these two factors must be added a 35% tax deduction for filming in Navarra, “the most attractive in the whole of Spain” and which has been applied since its approval in 2018. Precisely, this line of financing has allowed the development of important productions at an international level. Undoubtedly, a boost that has allowed the region to increase the number of shootings registered in its territory in 2019 from 100 to 141 in 2022, according to the data provided by the Navarra Film Commission.