Skip to main content
Form 100. Personal Income Tax Return 2023

10.11.10. For investment in the acquisition of shares or equity interests in new or recently created entities and their financing

Amount

Taxpayers may deduct from their regional tax rate 30% of the amounts invested during the year in the acquisition of shares or corporate interests as a result of agreements to form companies or increase capital in public limited companies, limited companies, labour companies and cooperatives.

With respect to the same entities, 30% of the amounts lent during the year may be deducted, as well as the amounts personally guaranteed by the taxpayer, provided that the loan is granted or the guarantee is established in the year in which the company is incorporated or its capital is increased.

Limit

The deduction will have a joint limit of 20,000 euros .

Requirements

  1. The taxpayer's participation, computed together with that of the spouse or persons related by reason of kinship, in a direct or collateral line, by consanguinity or affinity up to the third degree included, may not be greater than 40% or less than 1% of the share capital of the company that is the object of the investment or its voting rights at any time and during the three years following its incorporation or expansion.

    In the case of a loan or guarantee, the taxpayer's participation in the capital will not be necessary, but if it exists, it cannot exceed 40% with the same time limits as above. The amount lent or guaranteed by the taxpayer must be greater than 1% of the company's net assets.

    The maximum limit on participation in the share capital shall not apply in the case of worker-owned companies or cooperatives composed of only two partners, as long as this circumstance is maintained.

  2. The entity in which the investment is to be made must meet the following requirements:

    1. It must have its registered office and tax domicile in Galicia and maintain it for three years following its incorporation or expansion.

    2. It must carry out an economic activity during the three years following its incorporation or expansion. For this purpose, its main activity must not be the management of movable or immovable assets, in accordance with the provisions of article 4.8.Two.a) of Law 19/1991, of June 6, on the wealth tax.

    3. It must have, at least, one person employed with a full-time employment contract, registered in the general Social Security system and with habitual residence in Galicia. The contract will have a minimum duration of one year and must be formalized within two years following the constitution or extension, except in the case of labor companies or cooperatives.

    4. In the event that the investment is made through a capital increase, or the loan or guarantee is made in the year of an increase, the commercial company must have been established in the three years prior to the date of this increase, and in addition, during the twenty-four months following the date of the start of the corporate tax period in which the increase is made, its average workforce with habitual residence in Galicia increases by at least one person, with respect to the average workforce with habitual residence in Galicia in the previous twelve months, and that said increase is maintained for an additional period of another twelve months, except in the case of worker-owned companies or cooperative companies.

      To calculate the total average staff of the organisation and the growth thereof, the number of persons employed will be decided in accordance with the provisions of labour legislation, taking into account the contracted hours in relation to a full day.

  3. The taxpayer may be a member of the board of directors of the company in which the investment was made, but may not perform executive or management functions for a period of ten years. Nor may it maintain an employment relationship with the entity that is the object of the investment during that same period, except in the case of worker companies or cooperative companies.

  4. Transactions in which the deduction is applicable must be formalized in a public deed, in which the identity of the investors and the amount of the respective investment must be specified.

  5. The shares acquired must remain in the taxpayer's assets for a minimum period of three years following the incorporation or expansion. In the case of loans, these must refer to financing operations with a term of more than five years, and may not amortize an amount greater than 20% per year of the principal amount lent. In the case of guarantees, these will extend to the entire duration of the guaranteed operation, and may not be less than five years.

Non-compliance with requirements

Failure to comply with the established requirements and conditions entails the loss of the tax benefit, and the taxpayer must include in the tax return corresponding to the year in which the failure occurred the part of the tax that was not paid as a result of the deduction made, together with the accrued late payment interest.

Increased deduction

The deduction may be increased by an additional 15% when, in addition to meeting the requirements established for the deduction in general, one of the following circumstances occurs:

  1. These are public limited companies, limited companies, labour companies and cooperatives that prove to be innovative small and medium-sized companies, in accordance with the provisions of Order ECC/1087/2015, of 5 June, which regulates the obtaining of the innovative small and medium-sized company seal and creates and regulates the operation of the Registry of Innovative Small and Medium-sized Companies.

  2. These are public limited companies, limited companies, labour companies and cooperatives that prove to be companies promoting a business project that has obtained qualification as a technology-based employment initiative, in accordance with the provisions of Decree 56/2007, of March 15, which establishes a support programme for technology-based employment initiatives (IEBT), by registering the initiative in the administrative Registry of Technology-Based Business Initiatives.

  3. These include public limited companies, limited companies, labour companies and cooperatives with the participation of universities or research organisations.

The maximum deduction limit in this case is 35,000 euros.

Incompatibility

This deduction will be incompatible, for the same investments, with the deductions "For investment in the acquisition of shares or social participations in new or recently created entities", "For investment in shares of entities listed in the segment of expanding companies in the alternative stock market" and "For investment in companies that carry out agricultural activities."

Completion

  • You must indicate the amounts invested with the right to deduction. In the case of marriage, and if the investment is common to both, 50% must be reported in the declaration of each spouse.

  • It will reflect the NIF of the entity in which the investment is made.

  • If the investment is made in small and medium-sized innovative companies or those with the participation of universities or research organisations or in a business project classified as a technology-based employment initiative, the box provided for this purpose must be checked.

The program will transfer the amount to Annex B.8.