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Form 100. 2019 Personal Income Tax return

9.2. Deduction for investment in companies of new or recent creation

Taxpayers can deduct 30% of the amounts paid in the period for subscription of shares or holdings in new or recent creation, and may also contribute their business or professional knowledge to the capital, in addition to the bank's development in the amount invested in the terms established by the investment agreement between the taxpayer and the bank.

The deduction will only be applicable with respect to shares or shares subscribed from 29 September 2013 (date of entry into force of Act 14/2013)

The maximum deduction base will be 60,000 euros per year and will be comprised of the acquisition value of the shares or shares subscribed.

They will not form part of the deduction:

  1. The amount of the shares or shares acquired with the balance of the company's savings account, insofar as this balance would have been deducted.

  2. Amounts paid for subscription of shares or holdings, when any of the deductions established by their respective Autonomous Community are applied in the exercise of their powers in Personal Income Tax.

Requirements of the entity:

  1. The company must be classified as a Public Limited Company, Sociedad de Responsabilidad Limitada, Sociedad Anónima Laboral or Sociedad de Responsabilidad Limitada Laborales, and not admitted to trading on any organized market. This requirement must be met during all years of ownership of the share or share.

  2. They must carry out an economic activity that has the personal and material means for carrying out the activity. In particular, the activity of managing movable or immovable property may not be carried out in any of the tax periods of the entity that have been completed before the transfer of the share.

  3. The amount of the bank's own funds may not exceed 400,000 euros at the beginning of the tax period in which the taxpayer acquires the shares or shares.

    When the entity is part of a group of companies, regardless of the residence and the obligation to draw up consolidated annual accounts, the amount of the equity will be the total of entities belonging to that group.

Conditions for making the deduction:

  1. The shares or holdings in the entity must be acquired by the taxpayer either at the time of the incorporation of the shares or by means of a capital increase made in the three years following the constitution and remain in their assets for a term of more than three years and less than twelve years.

  2. The direct or indirect participation of the taxpayer, together with that held in the same entity by his spouse or any person related to the taxpayer by blood or marriage up to and including the second degree, may not, during any day of the calendar years in which the participation is held, exceed 40% of the capital stock of the entity or of its voting rights.

  3. That it is not shares or holdings in an entity through which the same activity as had been carried out previously by another holder is exercised.

  4. The amount of the shares or shares acquired with the balance of the company's savings accounts will not be included in the deduction base, insofar as this balance has been deducted. Please note that the deduction for savaged-company accounts has been abolished from 1 January 2015.

When the taxpayer transfers shares or shares and chooses to apply the exemption provided for in section 2 of article 38 of the Act , only the part of the reinvestment that exceeds the total amount obtained in the transfer of shares will form part of the deduction base corresponding to the new shares or shares subscribed. Under no circumstances may the deduction be made for new shares or holdings, while the amounts invested do not exceed the aforementioned amount.

To practice the deduction, a certificate issued by the entity must be obtained, indicating that the entity complies with the requirements indicated above for the entity in the tax period in which the shares or holdings are acquired.