B Law & Tax
20 July 2023

Tax advisor: Improved tax deduction for investing in new or newly created companies

Law 28/2022, approved on December 21, has introduced improvements to the deduction for investment in start-up companies as established in article 68.1 of the Personal Income Tax Law (LIRPF). These improvements include an increase in the deduction percentage from 30% to 50% and an increase in the maximum deduction base from 60,000 to 100,000 euros per year.

Requirements

– Taxpayers will be able to deduct 50% of the amounts invested in shares or participations of new or recently created companies, provided that they meet the established requirements. The maximum deduction base will be 100,000 euros per year and will be determined by the acquisition value of the shares or participations subscribed.

– The amounts that are already subject to deduction in an autonomous community will not be considered for the deduction.

– The companies in which the investment is made must meet certain requirements, such as being in the form of a corporation, limited liability company or labor companies, not being listed on any regulated market and carrying on an economic activity with the necessary resources.

– In order to apply the deduction, additional conditions must be met, such as acquiring the shares or participations at the time of incorporation of the entity or in subsequent capital increases, maintaining them in the equity for at least three years and not exceeding certain participation limits.

– In addition, the investment cannot be in an entity that carries on the same activity that was previously carried on under different ownership.

B Law & Tax International Tax & Legal Advisors.

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