Innovative start-ups and innovative SMEs.

Article 29 of Decree Law no. 179 of 18/10/2012 (converted into Law no. 17/12/2012) provides for favorable rules that allow IRPEF taxpayers and IRES taxpayers to deduct or deduct the amounts invested in innovative startups and to obtain various tax benefits.

The favorable tax discipline provided for IRPEF or IRES taxpayers investing in innovative startups has been modified and made permanent since 2017 (art. 1 Law 232/2016; press release MEF 2/10/2017) and authorized by the European Commission (SA 47184 18/09/2017).

As a result of the Decree of 7 May 2019 of the MEF implementing the indications referred to in the European Commission's authorisation of 17 December 2018, the tax benefits of equity crowdfunding are also extended to investments made in innovative SMEs.

In particular, the legislation on tax benefits provides:

  • For individuals subject to IRPEF, a deduction from gross taxation equal to 30% of the amounts invested in the share capital of startups or innovative SMEs, the maximum deductible investment may not exceed the amount of €1,000,000, for each tax period facilitated, for a maximum achievable savings of €300,000 per year. For partners of general and limited partnerships, the amount for which the deduction is allowed is determined in proportion to their respective shares in the profits.

If the deduction exceeds the gross tax, the excess can be deducted within the following 3 years.

  • For individuals subject to IRES a deduction from income equal to 30% of the amounts invested in the share capital of startups or innovative SMEs; the maximum deductible investment cannot exceed, in each tax period, the maximum amount of €1,800,000 and results in a maximum annual IRES saving of €129,600 (considering the IRES rate of 24%).

If the deduction exceeds the total declared income, the excess may be added to the amount deductible from the total income in the following tax periods, but not beyond the third, up to the amount of the deduction.

Indirect investments, i.e. made through the SPV, also benefit from the above tax benefits relating to equity crowdfunding.

Table summarizing tax benefits
  Deductions Maximum investment amount
Natural persons (Individuals subject to IRPEF) 30% investment in startups and innovative SMEs 1,000,000 euro per year
Legal persons (Subjects taxable IRES) 30% investment in innovative startups and SMEs 1,800,000 euros per year