Investors may apply the deduction for newly created companies in successive tax years

The possibility of applying tax benefits for investment in newly or recently created entities has raised doubts as to whether these deductions must be limited exclusively to the tax year in which the company is incorporated. The Dirección General de Tributos (DGT) has clarified that there is no legal impediment preventing a taxpayer from exercising this right in different tax periods.

What the DGT has ruled

The inquiry analyzes whether a taxpayer can apply the deduction for investment in newly or recently created companies in the 2026 tax year, after having made previous investments. The DGT's criteria establish that nothing prevents a taxpayer from applying the deduction in one tax period and in the following one, provided that all the requirements established in Article 68 of the Personal Income Tax Law (LIRPF) are maintained and met.

For this successive application to be valid, the following points must be observed:

• As a general rule, the capital increase must be carried out within five years following the incorporation of the company.
• In the case of startup companies, this period is extended to seven years.
• The requirements for both the company and the subscribed shareholdings must be strictly met in each tax year.

What this means for you

For individuals making investments in newly created entities, this criterion confirms the viability of a continuous investment strategy in the same company. If the entity meets the requirements regarding economic activity, form, and equity, and the investor makes new capital contributions in subsequent tax years, they may benefit from the deduction in each of those periods.

This provides greater flexibility for investors wishing to increase their stake in companies with growth potential without losing the tax incentive in the years following the initial incorporation of the entity.

What you should do

Since the application of the deduction depends on meeting requirements regarding both the company and the nature of the shareholdings, it is necessary to verify the company's situation in each tax year. It must be checked that the company maintains its status as a newly or recently created company and that capital increases comply with the legal periods of five or seven years, as applicable. Each case must be analyzed to ensure that the investment complies with the regulations in force at the time of its application.