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V0795-22 11 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión

Tax relief for investment in start-ups requires the subscription of shares or holdings

A query was raised regarding whether investing in start-ups through participating loans or convertible notes qualifies for Personal Income Tax (IRPF) relief. The Directorate General for Taxes (DGT) ruled that the deduction requires the subscription of shares or holdings, rather than the provision of financing.

The question raised

Whether a Personal Income Tax taxpayer may apply the deduction for investment in newly or recently created companies when the investment in the company is made via a convertible note or a participating loan.

The DGT's ruling

The deduction requires the subscription of shares or holdings in the incorporation or capital increase of the company. The granting of loans or other formulas that do not involve subscribing to shares does not entitle one to the deduction. However, if such credits are contributed to the company in a capital increase within three years following its incorporation, the deduction may be applied provided the other requirements of Article 68.1 LIRPF are met.

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