The Tax Shelter for start-ups and expanding companies is not new. And is focused on raising capital for start-ups and expanding companies. The temporary Tax Shelter was recently introduced for investments in SMEs that have seen their turnover fall due to the corona crisis. In view of the imminent revival of the economy, this could be very interesting for those considering investing in SMEs.
What does this exceptional Tax Shelter mean?
Originally, there was 20 percent tax relief for an investment of up to 100,000 euros when private individuals subscribed to new registered shares on capital increase of up to 250,000 euros between 14 March and 31 December 2020. The measure could be applied if there was a decrease in turnover of 30 percent between 14 March and 30 April 2020.
The measure has since been extended due to the second corona wave in the autumn. This means that SMEs that saw their turnover drop by at least 30 percent between 2 November and 31 December 2020 can again issue new shares with a tax advantage. The capital increase must be implemented between 1 January and 31 August 2021.
What are the advantages?
The great advantage compared to the other tax shelter regimes is that the tax advantage also applies to business leaders who invest in their own company when it is confronted with a decrease in turnover.
Which conditions apply?
The first condition is that the SME has total assets of no more than 4.5 million euros, an annual turnover (excluding VAT) of no more than 9 million euros and an average number of employees of no more than 50 on an annual basis.
Another condition is that the shares must be held for at least five years. An exception is provided in the event of death or bankruptcy. If the shares are sold earlier, the tax advantage must be partially repaid via the next tax return.
Are you not paying enough tax to offset the benefit? Then the part that cannot be settled is not lost. It is carried over to one of the next three taxable periods. Please note, the tax reduction is not transferred to the taxable period for which a reversal of the tax relief must be made.
Our experts take time to provide you with guidance
Curious to know whether your SME can apply this exceptional Tax Shelter? Then please contact us https://bofidi.eu/en/contact/ . Our experts will be happy to provide you with guidance.