The 2013 Entrepreneurs Law approved a deduction for investment in newly created companies to make it easier for entrepreneurs to raise their own funds and, at the same time, provide tax incentives to those taxpayers who wish to allocate their savings to another investment alternative.
This deduction for investment in new companies is regulated in article 68.1 of the Personal Income Tax Law and is applied to the full state tax liability.
How much can we deduct?
New for 2018, effective January 1, 2018, the amount paid during the tax year for subscribing to shares or equity interests in newly created or recently established companies will be 30% (previously 20%). This deduction will be applied to the investor's income tax return (IRPF).
The maximum deductible investment, new for 2018, €60,000 per year (previously €50,000 before January 1, 2018), resulting in a maximum deduction of €18,000 to be applied to the total state tax liability. The acquisition value of the shares/equity stakes will be used to calculate the deductible amount.
Most autonomous communities also offer their own regional tax deductions, but these are supplementary to the national deductions and never equal in amount. This means that if a taxpayer invests €70,000, they could claim the national deduction on €60,000, and the remaining €10,000 could be claimed using the regional deduction if the autonomous community allows it.
Furthermore, no tax is levied on the profit obtained from selling if it is reinvested in another new company (exempt).
Deduction requirements:
To be fulfilled by the entity in which the investment is made:
Company form: may be Public Limited Company (SA), Limited Liability Company (SL), Worker-Owned Public Limited Company (SAL) or Worker-Owned Limited Liability Company (SLL) (non-listed companies).
Economic activity: It is necessary to carry out an economic activity with personnel and material resources. Companies whose activity is the management of real estate or movable assets will not be accepted.
Equity: may not exceed €400,000 per year at the time of acquisition of the shares or equity interests. If the company is part of a group, this limit will apply to the equity of all the entities in the group.
In addition, the following other conditions must be met by the investor and the company:
Holding period: the shares/shares acquired must be held for a minimum of 3 years and a maximum of 12.
Maximum participation: the investor may not hold more than 40% of the share capital or voting rights, either directly or indirectly through his spouse or relatives up to the second degree of consanguinity.
New activity: shares in entities that carry out the same activity that was being carried out by another company will not be deductible.
Formal requirement:
To claim the deduction, the taxpayer must obtain a certificate from the company stating that the requirements have been met.
The company must submit to the Tax Office in January of the following year form 165 (an informative declaration), in which it will have to identify the partners to whom the accreditation certificate has been issued, indicating the percentage that their participation in the company's share capital represents and the date of acquisition.
If you require our assistance to obtain further information or have any questions, please contact us via our legal email address, ambit@ambitassessor.com, or at our offices.
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A graduate in Business Administration from the University of Barcelona, she supplemented her studies with courses in customer service and corporate tax. While working and studying, she worked in sales and teller operations at La Caixa d'Estalvis i Pensions de Barcelona (now Caixabank) in 2007. From 2010, she worked as an advisor and accountant at Fiscalsegur and PKF Asesores. In March 2017, she joined Àmbit Assessor, SL as a tax and accounting consultant.
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