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V3559-20 15 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión

Deduction for investment in start-ups plus interest must be repaid if holding period is not met

The taxpayer asks how to regularise the tax deduction for investment in new or recently created companies after failing to hold the shares for the minimum period of three years. The DGT rules that the improperly claimed deduction, along with late payment interest, must be added to the state net tax liability.

The question raised

How should the deduction for investment in newly or recently created companies, as provided for in Article 68.1 of the Personal Income Tax Law, be regularized when the three-year holding period for the interests in the taxpayer's assets has not been met.

The DGT's ruling

Failure to comply with the holding period for shares or interests (greater than three years and less than twelve years) results in the loss of the right to the deduction. The taxpayer must regularize their situation by adding to the state net tax liability the total amount of the unduly applied deductions plus the late payment interest provided for in the General Tax Law.

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