RSUs in Spain. Spanish law has no figure called an RSU. Your tax comes from three places at once: what the plan says, where you were resident while it vested, and what you did with the shares afterwards. Change one of the three and the answer changes, sometimes by a lot of money.
Henrik Dahl is Danish and has lived in Madrid since 2019. His employer, a Boston tech company with a Spanish subsidiary, grants him options every year. In 2024 he exercised those he received in 2021 and obtained a spread of 90,000 €. In 2026 he wants to exercise those from 2022, with an expected spread of 60,000 €, and those from 2023 later on. A colleague has told him that options more than two years old "come with a 30 % discount". That is half true: the reduction exists, but Henrik will only be able to use it once every so often, and his company's system of annual grants works against him.
What article 18.2 actually says
The Spanish Income Tax Act provides a 30 % reduction for employment income that has a generation period of more than two years and is allocated to a single tax period. It is not a rule designed for options; it applies generally to any employment income that has built up over more than two years and is received at once. Stock options fit it when more than two years pass between grant and exercise.
The same provision adds limitations that are best read together:
| Limitation | What the law establishes |
|---|---|
| Generation period | More than two years |
| Allocation | To a single tax period |
| Maximum amount | The reduction applies to income of up to 300,000 € a year |
| Repeated use | It does not apply if, in the five periods before the one in which the income is due, it was already applied to other income with a generation period of more than two years |
There is also a sliding scale for income between 700,000 € and 1,000,000 € deriving from the termination of an employment relationship or of the commercial relationship of company directors, which does not affect an ordinary option exercise.
How generation is measured for an option
The generation period of an option is counted, on the usual reading, from the grant date to the date of exercise, which is when the income is obtained. In a plan with staggered vesting, each tranche vested and exercised carries the same grant date. If Henrik received options in March 2021 and exercised them in June 2024, the period exceeds two years, even though the last tranche vested in 2024. This criterion is not written in those words in the law and can be disputed in borderline cases, which is why it is worth keeping the dated grant letter.
If the gap between grant and exercise is two years or less, there is no reduction, whatever the amount. You can follow each date in when my stock options are taxed.
Henrik's calculation for 2024
- Spread on the 2024 exercise: 90,000 €.
- Generation: March 2021 to June 2024, more than two years.
- Did he apply the reduction to other multi-year income between 2019 and 2023? No.
- Does it exceed 300,000 €? No.
- Reduction: 90,000 × 30 % = 27,000 €.
- Income included in the general base: 63,000 €.
At his marginal rate, those 27,000 € left out represent a noticeable saving. So far, his colleague's remark was correct.
The problem arrives in 2026
In 2026 Henrik exercises the 2022 options. Generation: more than two years. Amount: 60,000 €. But now the fourth limitation comes into play: the law looks at the five tax periods before the year in which the income is due, that is, 2021 to 2025. In 2024 he applied the reduction to other income with a generation period of more than two years. So in 2026 he cannot apply it.
- Spread for 2026: 60,000 €.
- Previous periods reviewed: 2021, 2022, 2023, 2024 and 2025.
- Reduction applied in 2024: yes.
- Result: the 60,000 € are included in full.
And the same will happen with the 2023 options if he exercises them before 2030. That is the effect of annual grants: every year there is a new package that meets the two years, but the law only lets you use the reduction once in any window of six tax years.
The five-year rule does not distinguish between options and other items. If during that period you received a multi-year bonus, a retention award or other income generated over more than two years and applied the 30 % to it, the reduction on your options is blocked even if you have never exercised before. Income deriving from the termination of the employment relationship has its own rule and, according to the same article, does not count for this purpose.
Choosing when to use it
If the reduction can only be used once in the window, the logical thing is to keep it for the largest exercise. In Henrik's case, had he known that the 2022 and 2023 options would be worth much more than those from 2021, he might have been better off delaying the 2024 exercise. The law does not frame the reduction as something you can save up: if the requirements are met, it applies. The room for planning lies in choosing when to exercise, and the future value of the shares is uncertain. Planning it means looking at the full grant calendar and the expected value, with no guarantee of getting it right.
| Scenario | Spread | Reduction? | Income included |
|---|---|---|---|
| 2024 exercise (2021 options) | 90,000 € | Yes | 63,000 € |
| 2026 exercise (2022 options) | 60,000 € | No, because of 2024 | 60,000 € |
| Exercise in 2030 (2023 options) | Unknown | Possible, if not applied between 2025 and 2029 | To be calculated |
The 300,000 € cap
If the 2024 spread had been 420,000 € instead of 90,000 €, the reduction would not have applied to the whole amount:
- Portion entitled to the reduction: 300,000 €.
- Reduction: 300,000 × 30 % = 90,000 €.
- Income included: 420,000 − 90,000 = 330,000 €.
The cap is annual and refers to the amount of income on which the 30 % is calculated, not to the amount of the reduction.
Splitting the exercise of a single grant
The law requires the income to be allocated to a single period. If Henrik exercises half of a grant in one year and the other half in the next, the question arises whether each exercise is separate income or whether splitting jeopardises the reduction. It is a point with no safe answer in the legal text and it is worth analysing before exercising, not afterwards. Exercising each grant in full in a single year avoids the doubt, although it is not always the most convenient course for other reasons, which we cover in exercise now or wait.
You can send us your history of grants and exercises for the last six years through the equity form so that we can check whether the reduction is still available.
RSUs, start-ups and the special regime
RSUs can also meet the generation requirement, especially double-trigger ones, as we explain in how RSUs are taxed. For options in an unlisted start-up, the reduction sits alongside other rules of its own, covered in options in an unlisted start-up. And anyone taxed under article 93 does not apply income tax reductions to their employment income, because their tax is calculated under the rules of the non-resident income tax (IRNR).
The Salama Tax page on stock options and RSUs sets out how a taxpayer's history is reviewed before deciding in which year each reduction is applied.