Law 4712/2020 provides for the creation of the National Register of New Businesses and provides tax incentives to individuals who invest in start-up businesses in order to reduce investment risk and increase investment activity.

In particular, article 70A of the Income Tax Code provides that in the event that a taxpayer – an individual contributes capital to a capital company registered in the National Register of Young Enterprises (NCER), an amount equal to 50% of the amount of his contribution is deducted from his taxable income in proportion to each category of declared income of the tax year in which the contribution was made. The recent Ministerial Decision 39937/2021 further clarified this issue: A “startup company” is any public company (A.E.), limited liability company (EPE) and private equity company (IKE) that has its own headquarters. -apartment in Greece and registered with EMNE “ElevateGreece” at the time of the capital injection. “Investment angel” (angel investor) means any natural person, tax resident in Greece or abroad, holder of a Greek VAT number, who contributes financial capital to start-up companies for the purpose of their common development.

An Investment Angel may be entitled to a deduction from its taxable income for capital investments in startups totaling €300,000 per tax year, which can be made in respect of a maximum of three different start-ups and up to the amount of €100,000 per company. The contribution of capital is carried out by increasing the equity or corporate capital of the company by issuing new shares or corporate shares and is carried out without fail through a bank deposit.

In this context, a taxpayer who contributes €100,000 to a start-up SA, LLC or IKE will be able to deduct €50,000 from the taxable income of the relevant tax year (and not be taxed for how much).

The payment of the amount of money intended for capital injection is carried out by transfer from a bank account opened by an “investment angel” in Greece or abroad to a start-up company account opened with a Greek banking institution and is confirmed exclusively by a relevant bank document. The contribution to the capital is declared by the start-up company on the electronic platform “Elevate Greece” by providing data confirming its implementation. The declaration is submitted by the end of the next month from the date of registration with GEMI confirming the payment of the capital increase. The deduction from the taxable income of the investment angel is made by showing the amount of the capital contribution in the income tax return for the tax year in which it was paid, provided that the realization of the capital contribution was completed by the deadline for filing income tax returns for that year . Supporting documents confirming the contribution are the certificate of the legal representative of the start-up company on the capital increase, the relevant decision of the competent company, the GEMI certificate on the registration of the capital increase decision and the proof of payment. on the increase and a bank document on the contribution of the authorized capital. In the event that a capital contribution is completed after the deadline for filing an income tax return for the tax year in which the payment was made, the deduction from taxable income is made in the tax year in which it was completed. In the event of a full or partial return of capital paid as described above but not used for the general development of the business, the investment angel must submit an appropriate change statement for the tax year in which he received the tax advantage, removing some or all of the depending on the circumstances, the amount of the capital contribution. If, after an appropriate check by the competent tax authority, it is proved that the capital contribution was made in order to obtain a tax advantage contrary to the purpose of the law, a fine is imposed on the individual in the amount of the amount of the desired benefit.

* Ms. Jenny Panu is the head of the tax department of AS Network (www.asnetwork.gr).