Skip to main content
Practical manual for Income Tax 2023.

By investment in the acquisition of shares and social participations of new or recently created entities

Regulations: Art. 15 Text Consolidated legal provisions of the Community of Madrid on taxes transferred by the State, approved by Legislative Decree 1/2010, of October 21

Amount and maximum limit of the deduction

  • In general: 40 percent of the amounts invested during the financial year in the acquisition of shares or corporate interests as a result of agreements to establish companies or increase capital in commercial companies that take the form of a Public Limited Company or Limited Liability Company.

    The deduction limit applicable is 9,279 euros per year.

  • 50 percent of the amounts invested during fiscal year in the acquisition of shares, interests and social contributions as a result of agreements to establish or increase the capital of employee-owned corporations, employee-owned limited liability companies and cooperative companies.

    The limit of the applicable deduction is 12,372 euros .

  • 50% of the amounts invested during the financial year in the case of companies created or participated in by universities or research centers.

    The limit of the deduction is 12,372 euros.

Note: Please note that the deduction is applied for three different types of investments, for each of which a different and independent limit is established.

Requirements and other conditions for the application of the deduction

The following requirements and conditions are not applicable when it comes to investments made in entities created or participated in by universities or research centers:

  • The participation acquired by the taxpayer as a result of the investment, computed together with the participation held in the same entity by his/her spouse or persons related to the taxpayer by reason of kinship, in a direct or collateral line, by consanguinity or affinity up to the third degree included, may not exceed during any day of the calendar year 40% of the total share capital of the entity or its voting rights .

  • That said participation is maintained for a minimum of three years.

  • That the entity from which the shares or interests are acquired meets the following requirements:

    1. That it has its registered office or tax domicile in the Community of Madrid .

    2. That develops a economic activity .

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

    3. In the event that the investment made corresponds to the constitution of the entity, which since the first fiscal year has had at least one person hired a full-time employment contract and registered in the general Social Security regime.

      Note: In the case of employee-owned corporations, employee-owned limited liability companies and cooperative companies, this requirement will not be applicable.

    4. In the event that the investment has been made through a capital increase of the entity, that said entity had been established within the three years prior to the capital increase and that the average workforce of the entity during the two fiscal years following the increase increases with respect to the average workforce it had in the previous twelve months by at least one person with the previous requirements, and that said increase is maintained for at least another twenty-four months .

      To calculate the total average workforce of the entity and its increase, the number of employees will be taken into account, in accordance with the terms established by labour legislation, taking into account the contracted working day in relation to the full working day.

Note: Taxpayers entitled to the deduction must complete the section "Additional information on the regional deduction for investment in the acquisition of shares and equity interests in new or recently created entities" in Annex B.8 of the declaration in which, in addition to the amount of the investment entitled to deduction, the NIF of the newly or recently created entity must be stated and, if applicable, that of the second entity, indicating the total amount of the deduction for investments in newly or recently created companies in the corresponding box.