What are the tax benefits provided for innovative startups?

The 2017 Budget Law first introduced a series of tax advantages which an innovative Startup may benefit from, consisting of:

  • Exemption from stamp duties and annual fees, at the time of registration of the Startup in the Company’s Register;
  • Tax incentives for corporate and private investments in startups;
  • Total tax deduction on the revenues resulting from financial instruments offered to collaborators, employees, suppliers or consultants as way of additional remuneration.

Which benefit may I have in investing in an innovative startup?

The 2019 Budget Law has boosted the tax incentives for corporate and private investments in startups, both by individuals and by legal entities, already provided under the 2017 Budget Law although in smaller amounts. This benefit envisages for individuals a deduction on personal income tax (IRPEF) amounting to 40% of the amount invested, up to a maximum sum of € 1 million.

For legal entities the benefit consists in a fiscal deduction on the taxable income for company tax purposes (IRAP) equal to 40% of the amount invested, up to a maximum of € 1.8 million. However, in case of acquisition of the entire share capital, the deduction rises to 50%.