Marco Sandoli is Partner at Di Tanno Associati, a notable tax and legal consultancy firm in Italy, with offices in Milan and Rome.
Marco is also Member of IFA (International Fiscal Association) and of the Board of Statutory Auditors of several industrial companies and financial intermediaries.
He is an expert in corporate taxation, international taxation, taxation of financial products, private equity funds, cross-border M&A, taxation of individual assets and tax litigation.
Marco studied Law at University of Padova and he is member of the Italian Bar since 2004.

Q: Recently, the so-called Relaunch Decree introduced the new 50% tax credit for Italian-based investors in innovative start-ups and SMEs. Can you better explain the terms of the new incentive?
Marco: With the publication in the Official Journal (no. 38 of 15.2.2021) of the Ministerial Decree of 28 December 2020 (“Decree”), the implementation process of the de minimis tax benefits for investments in innovative start-ups and SMEs, introduced by paragraphs 7 and 8 of Legislative Decree no. 34 of 19 May 2020 (the “Relaunch Decree”), was finally completed.
The so-called Relaunch decree strengthened the incentives already provided for investments in innovative start-ups and SMEs under Decree-Law No. 179/2012, granting individuals, as an alternative to the ordinary 30% tax incentive, a tax credit equal to 50% of the investment in accordance with the de minimis limits set out in EU Regulation No. 1407/2013.
The maximum 50% eligible investment in innovative start-ups cannot exceed €100,000 in any tax period (for a maximum tax credit amount of €50,000), while the investment in innovative SMEs cannot exceed €300,000 (for a maximum deduction amount of €150,000). The investment must be maintained for at least three years, otherwise the tax incentive must be returned with interest.
The primary legislation and the Decree specify that, for investments in innovative SMEs, the 50% tax deduction is applicable to investments up to € 300,000, and for the part exceeding that limit, a 30% tax deduction can be applied. Although this provision literally refers only to investments in innovative SMEs, it should also apply to investments in innovative start-ups. So, for example, in the case of a €400,000 investment in an innovative SME, €300,000 will be eligible for the 50% deduction (i.e., €150,000, which is within the de minimis limit), while the remaining €100,000 should be eligible for the 30% tax credit (i.e., €30,000).
The Decree, in line with the provisions of the ordinary incentive, clarified that the eligible types of investments are cash contributions for capital increases registered in the company books as share capital and share premium reserve, conversions of convertible bonds, but also subscription of capital increases through the offsetting of financial credits. Moreover, the Decree confirmed the possibility to use in the subsequent three tax periods any unused deduction.
Contrary to the expectations of the operators of the Italian start-up ecosystem, the new tax incentives cannot be applied by limited liability companies that invest primarily in innovative start-ups or SMEs. On this point, it should be recalled that the lack of provision of this possibility in the primary law would not have been per se an obstacle to the application through the Decree, as for the 30% tax credit, where the same extension took place in the Decree.
On the basis of the regulatory framework outlined above, both business angels who make their investments through dedicated vehicles (as in the case of business angel associations) and those who invest through equity crowdfunding portals that collect investors in dedicated vehicles, as well as the subscribers of some major accelerators, including listed ones, are therefore excluded from the benefit. This exclusion seems difficult to understand considering that a significant proportion of investments is made using these operating models.
Q: So, the incentive is linked to the company’s de minimis plafond. What does it mean precisely?
Marco: As regards the determination of the de minimis plafond, the Decree does not provide any useful indication. Unlike the ordinary incentive of 30%, the 50% incentive is granted within the State aid plafond for the company granted under the de minimis rule, which is €200,000 over three financial years.
Since the aid for the company is represented by the fact that its investor can benefit from a tax credit equal to 50% of the amount invested, it seems reasonable to consider that the company’s de minimis plafond should be considered eroded to the extent of the tax credit granted to the investor (i.e., 50% of the capital increase for which the incentive is granted), and not to the extent of the total invested capital. Following this interpretation, assuming that the company has not benefited from any de minimis aid in the previous three years, the maximum amount of the capital increase eligible for the tax deduction should be €400,000.
Since the 50% incentive is deemed to be a State aid for the company, the latter should be free to grant the incentive to the investors for example according to specific investment agreement as well as not to grant the incentive and keep intact the company’s de minimis plafond.
Q: What are the operational procedures that individuals or companies must follow in order to access to the tax benefit?
Marco: The Decree requires the company to submit, before receiving the investment, a special application via the online platform which will be made available on the MISE website.
In this way, the MISE will check, through the national register of state aid, the actual company’s availability of the de minimis plafond in relation to the amount of the aid, and will notify both the company and its investors of the results of this check. Only after receiving this notification, the company will be able to finalise its application in favour to the investors.
A negative outcome of the MISE preliminary check prevents the finalisation of the application and thus the investors’ access to the benefit. If, on the other hand, it emerges that the company has already partially used the €200,000 plafond for de minimis aid, the company must submit a new application, indicating the amounts recalculated according to the plafond.
Finally, within 30 days of the investment, the company must provide each investor with a declaration, attesting the amount of the investment, the COR code issued by the national register of State aid and the amount of the deduction that can be used.
In addition to the complexity of the described procedure, it is clear that the preliminary check of the MISE is hardly compatible with capital raised through equity crowdfunding platforms. In fact, in this kind of transactions the investors make payments in full autonomy without prior contact with the issuing company.
A literal interpretation of the rule could lead to the conclusion that a payment made by the investor before the company has submitted the application for a preliminary check of the de minimis plafond could prevent the investor from accessing the incentive.
However, a rationale interpretation, which also allows investors of equity crowdfunding platforms to access to the incentive, would be to deem the investment made not when the payment is effectively made but when the certification of the completion of the share capital increase is filed with the Register of Commerce according to articles 2444 and 2481-bis of the Civil Code. Following this interpretation, which is compliant with the rule to determine the relevant tax period of the incentive, also investors through equity crowdfunding platforms would be allowed to comply with the requirement of the preventively of the application.
Finally, it is confirmed that the new benefits are also applicable to investments made in 2020 after the Relaunch Decree came into force (19th May 2020), as well as to those made in 2021 until the MISE platform becomes operational. For such investments, the application must be submitted in the period between 1st March and 30th April 2021.
Q: What do you think of the overall Italian tax framework related to start-ups and start-up investments?
Marco: In the last years the Italian tax framework related to start-up investments has been significantly strengthened, first by increasing the percentage of the ordinary incentive from 19% to 30% and the relevant yearly plafond from € 500,000 to 1 million, then by introducing the new incentive of 50%.
However, the fact that the 50% incentive is granted in compliance with the de minimis limitsset out in EU Regulation No. 1407/2013 and that the access to the benefit is so complicated, have greatly weakened the incentive. Indeed, if the company decides to grant to the investor the 50% incentive this reduces the € 200,000 plafond for de minimis aid which means fewer straight grants, guarantee on loans etc. If so, under a company perspective seems better to keep on hold the € 200,000 plafond and leave to the investor to benefit from the ordinary 30% incentive.
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