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Investing in a start-up: income tax deductible

If you are an investor in newly created companies, check that the company has filed form 165.

The deadline ends this week, and it is essential for the right to deduction in your income tax return.

Investments in new companies or start-ups have tax benefits for investors. Those partners who in 2023 have made a contribution to a start-up company will be able to enjoy a 50% deduction on their personal income tax return. The maximum amount is 100,000 euros, so the deduction may reach 50,000 euros per year.

The main requirement is that the contribution has been made within the first 5 years for start-ups, or 7 years in the case of start-ups.

Of course, the company must file form 165 (“Informative declaration of certifications issued to partners or participants of new or recently created entities”) indicating the contribution received from each partner, and subsequently grant the corresponding certification to the partners that meet the requirements to be able to apply said deduction.

Tax Department.

Álvaro Porcar Attorneys-at-Law