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Practical Income Manual 2020.

By investment in the acquisition of shares and participations as a consequence of agreements to establish companies or increase capital in companies

Regulations: Art. 11 Text Recast of the legal provisions of the Autonomous Community of Extremadura regarding taxes transferred by the State, approved by Legislative Decree 1/2018, of 10 April.

Amount and maximum limit of the deduction

  • 20 percent of the amounts invested during fiscal year 2019 in the acquisition of shares or equity interests as a result of agreements to establish companies or increase capital in entities that have the nature of Public Limited Company, Limited Liability Company, Labor Limited Company, Labor Limited Liability Company or Cooperative Society .
  • The deduction limit applicable will be 4,000 euros per year.

Note: Taxpayers entitled to the deduction must complete the section "Additional information to the regional deduction for investment in the acquisition of shares and social participations in new or recently created entities" of Annex B.6 of the declaration.

Requirements and other conditions for the application of the deduction

  • That, as a consequence of the participation acquired by the taxpayer, computed together with that held in the same entity by his spouse or persons linked to the taxpayer by reason of relationship , in a direct or collateral line, by consanguinity or affinity up to and including the third degree, not own more than 40 percent of the total capital on any day of the calendar year of the entity or its voting rights.
  • That the acquired shares must be maintained in the taxpayer's assets for a minimum period of three years following the constitution or expansion and the taxpayer must not exercise executive or management functions in the entity.
  • That the entity from which the shares or participations are acquired meets the following requirements:

    1. That has its social and tax domicile in the Autonomous Community of Extremadura .
    2. That develops an economic activity .

      For these purposes, it will not be considered that it carries out an economic activity when its main activity is the management of movable or real estate assets, in accordance with the provisions of article 4.Eight.Two.a) of Law 19/1991, of 6 of June, of the Wealth Tax.

    3. That, in the case in which the investment made corresponds to the constitution of the entity, from the first fiscal year it has at least one person with a full-time employment contract, or with two people with a full-time employment contract. part-time , provided that the total count of hours in the case of a part-time employment contract is equal to or greater than that established for a person with a full-time employment contract. In any case, workers must be registered in the corresponding Social Security Regime, and the conditions of the contract must be maintained for at least twenty-four months.
    4. That, in the case in which the investment made corresponds to a capital increase of the entity, said entity had been established within the three years prior to the capital increase and the average staff of the entity during the two fiscal years following the expansion is increased with respect to the average workforce it had in the previous twelve months by at least one person with the requirements of paragraph 3 above, and said increase is maintained for at least another twenty-four months .

      To calculate the entity's total average workforce and its increase, the number of people employed will be computed, in the terms provided by labor legislation, taking into account the contracted day in relation to the full day.

  • The operations 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.

Loss of the right to the deduction made

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 failure. deduction made together with accrued late payment interest.