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V2668-19 30 September 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión

Investment tax credit for startups unavailable if second-degree relatives hold more than 40% stake

A taxpayer inquired whether they could claim a tax deduction for investing in a newly incorporated limited company alongside their two siblings. The Directorate General for Taxes (DGT) ruled that this is not permitted, as the combined holdings of second-degree relatives must not exceed 40% of the share capital.

The question raised

Possible application by the taxpayer of the deduction for investment in newly created or recently established companies regulated in Article 68.1 of the Personal Income Tax Law.

The DGT's ruling

To apply the deduction for investment in newly created or recently established companies, the taxpayer's shareholding, combined with that of their spouse or relatives up to the second degree of consanguinity or affinity, may not exceed 40% of the share capital or voting rights. As the partners are siblings (second-degree relatives), this limit established in Article 68.1 of the Personal Income Tax Law is breached.

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