Are you interested in supporting startups while reducing your tax burden? The tax deductible investments in newly created companies is a powerful fiscal tool that allows investors to recover up to 50% of their investment directly on their tax return. If you meet the legal requirements, you can apply this deduction for up to €100,000 annually, which represents a potential saving of €50,000.
What is the Tax Deduction for Investing in Startups?
This state-level IRPF incentive (Article 68.1 of the IRPF Law) is designed to encourage private financing of innovative startups. As of January 1, 2023, the deduction rate increased from 30% to 50%, and the maximum deductible base rose from €60,000 to €100,000 per year. This makes tax deductible investments in new companies a highly attractive option.
Requirements for the Recipient Company
For you to apply the deduction, the company must meet all of the following conditions:
- It must be an SA, SL, SAL, or SLL that is not listed on an organised market.
- It must have its own human and material resources for its economic activity (it cannot be a holding company).
- Its equity at the beginning of the tax year cannot exceed €400,000 (including within a corporate group).
Investor Requirements to Apply the Deduction
As an investor, you must comply with these tax deductible investments conditions:
- Acquire shares or participations through a monetary contribution in a new or recently created company.
- Hold them for more than 3 years and less than 12 years.
- Not own more than 40% of the share capital, either alone or with family members up to the second degree (with exceptions for founding partners of emerging companies).
- Not have carried out professional or administrative activities in that company before the investment.
Maximum Limit and Tax Savings Calculation
The maximum deductible base is €100,000 per year, with the possibility of a reduction of up to €50,000 from your state tax liability.
- If you invest more: The excess can be used for a regional deduction, depending on regional regulations (for example, some regions allow an additional percentage to be applied to the excess).
How to Apply This Deduction on Your Tax Return
- Request an official certificate from the company that verifies it meets the requirements of Article 68.1 of the IRPF Law and that your participation complies with the established limits.
- Keep a record of the contribution (bank transfer, deposit).
- In the “Renta Web” platform, go to the section for “Deduction for investment in newly created companies,” and enter the company’s NIF, the amount invested, and the date.
- Attach the documentation if required by the Tax Agency.
Additional Advantages and Regulatory Context
This deduction is complemented by Law 28/2022 (the Startup Law), which improved the conditions by increasing the percentage to 50%, expanding the base, and extending the subscription deadlines (up to five years from incorporation or seven for emerging companies).
Furthermore, if you sell your shares after at least 3 years and reinvest, the capital gain may be exempt from tax under Article 38 of the IRPF Law.
Example: If you invest €50,000 in a startup in January 2025 that meets all the requirements, you can automatically deduct 50%, which is €25,000, on your 2025 IRPF tax return.
Frequently Asked Questions (FAQs)
Can I apply the deduction if I invest through a crowdfunding platform?
Yes, as long as the platform is registered with the CNMV and the recipient company meets the requirements of Article 68.1 of the IRPF Law and issues the required certificate.
What happens if I sell my shares before 3 years?
You will lose the right to the deduction and must regularise the situation with the Tax Agency, returning the deducted amount plus the corresponding legal interest.
Is this deduction compatible with others, such as for donations or housing?
Yes. You can apply it along with other IRPF deductions. Remember to check your total annual limit for independent legal deductions.
This fiscal incentive is a strategic opportunity for investors who wish to support the entrepreneurial ecosystem while optimising their tax bill. The tax-deductible investments in new companies offer a great fiscal and social impact, provided that the legal requirements are rigorously met and the necessary documentation is kept.
If you need personalized assistance, at Entre Trámites we offer management and tax advisory services for freelancers and SMEs. You can contact us through this contact form for us to call you, or if you prefer, you can schedule a free consultation or write to us on WhatsApp.
