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Practical Income Manual 2022.

Deduction for investment in companies of new or recent creation

Regulations: Articles 68.1 and Additional Provision thirty-eighth.2 Law Personal Income Tax

The deduction for investment in new or recently created companies is introduced in the Personal Income Tax with the purpose of encouraging the acquisition by new or recently created companies of own funds from taxpayers that, In addition to financial capital, they wish to contribute their business or professional knowledge for the development of the society in which they invest (proximity investor or “business angel”), or also those taxpayers who are only interested in contributing capital (seed capital).

The highlights of this deduction are the following:

  1. Purpose, maximum base and percentage of the deduction
  2. Requirements and conditions for your application
  3. Deduction limit: verification of the financial situation
  4. Example: Application of the deduction for investment in companies of new or recent creation