Temporary extension of tax shelter
The new scheme is clearly based on the already existing tax shelter for start-ups and growth companies. Under these systems, you as a taxpayer benefit from a tax reduction of 25%, 30% or even 45% if you invest in SME companies during the first 4 years after incorporation ('start-ups') or during the period thereafter until the 10th year after incorporation ('growth companies').
Contrary to the systems already in place, the 'corona tax shelter' does not impose any age condition on the companies in which investments can be made. However, turnover must have fallen by at least 30% in the period from 14 March 2020 to 30 April 2020 compared to the same period in 2019. In the case of a start-up company, a comparison must be made with the turnover forecast in the financial plan.
As with the tax shelter for start-ups and growth companies, some companies are explicitly excluded from the award scheme. For example, you do not receive a tax reduction if you acquire shares of listed companies, management companies and certain real estate companies.
A company manager who invests in their own company can also benefit from this tax reduction.
Advisor Tax & Legal
A company can raise up to €250,000 in this way. However, it is perfectly possible to combine the corona tax shelter with the existing tax shelter systems, so that in case of a start-up up to €500,000 can be collected.
For company managers too!
The tax reduction requires the acquisition of newly issued registered shares, which must be paid up by 31 December 2020 at the latest. Only a contribution in cash is eligible. An important easing here is that company managers
can also subscribe to the capital increase of their own company under this temporary measure. However, the maximum limit of 30% of the share capital still has to be taken into account: payments for the acquisition of a higher shareholding do not entitle the holder to the tax reduction.
Tax reduction of 20% on €100,000
The investment amount for which this tax reduction can be granted is limited to €100,000. The tax credit itself amounts to 20% and is transferable to the next three taxable periods. However, if the conditions of the scheme are no longer met, the tax credit will be (partially) reversed.
We base our advice on current legislation, interpretations and legal doctrine. This does not prevent the administration from being able to challenge it or to change existing interpretations.