TAX BENEFITS
Tax credit for investments in innovative start-ups increased from 30% to 40%
Exit tax on shares acquisition
Business angels saw their status recognized by Italian law. The Consolidated Law on Finance (Testo Unico della Finanza, TUF), as amended by the 2019 Budget Law, defines them as: “investors supporting the innovation who invested, directly or indirectly, a sum of at least 40.000 euros in the last three years.”
Tax credit raised from 30% to 40%
Business angels will enjoy the rise of the tax credit on investments on start-ups, from 30% to 40%. Innovative start-ups have suffered from the lack of resources available on the Italian market, as compared with foreign ones, especially in the USA. Silicon Valley law firms frequently invest directly in innovative start-ups, also with the work for equity solution.
This option is still not adopted in Italy where most start-ups fund themselves with their own resources; only a few can access to bank credit and even fewer are those invested by venture capital funds. This funds mainly select their targets among those supported by technology incubators.
This results in many promising start-ups, despite their intangible assets, spending too much time and efforts in the seed or pre-seed phases asking for funds without success.
The Government scores a good point by introducing facilitation rules to ease start-up financing.
Acquisition of shares
As for the taxation on the exit, that is on the sale of the investment, the 2019 Budget Law financial inserts a considerable tax relief for those who gain totalitarian shareholdings in innovative start-ups: the corporate taxpayer that gain the entire share capital of an innovative start-up enjoys a tax credit equal to 50% of the purchase price. The tax credit only applies in case of shares held for at least 3 years.
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