Tax Incentives on Investments in Innovative Startups Guidelines in English now online

Ms. Ilaria Petracca's picture
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 The English version of Circular no. 16/E, the document providing helpful and practical clarifications on the new tax rules aimed at encouraging the development and funding of innovative startups and certified incubators, is now available on the Italian Revenue Agency and the Italian Ministry of Economic Development's official websites (www.agenziaentrate.it, www.mise.gov.it).
Particularly, the objective of such measures is to foster a new entrepreneurial culture more geared towards innovation and promote the attraction of foreign capital to Italy.

The new set of tax incentives is aimed at incentivizing investments in innovative startups (as defined by Decree-Law 179/2012, converted into Law 221/2012) by individual and corporate stakeholders.

The tax benefits range from the exemption from stamp duties and other fees following the subscription of innovative startups into the Italian Business Register to the exclusion of a key anti-avoidance tax presumption.

With reference to individual investors, they can deduct 19% of the undertakings in the innovative startup's share capital from the personal income tax due, yet the tax credit is allowed on an investment not exceeding 500.000 euros. On the corporate side, the deduction from the total income is equal to 20% of the amount invested in the startup, as the threshold amounts to 1,8 million euros for each fiscal period. A more favorable regime is also provided for investments in startups operating in specific sectors. In fact, in case of investment in innovative startups with a social goal or operating in the green energy sector, the tax credits climb from 19%/20% to 25%/27% respectively. Such tax breaks apply over the period 2013-2015.

Finally, innovative startups may benefit from a tax credit equal to 35% of the costs due for hiring highly qualified employees.