Many people who invested in an Italian innovative startup (startup innovativa) did so partly because of the tax incentives: part of the investment comes back as a reduction of personal income tax (IRPEF). When the startup stalls, the investor's questions are blunt. Do I lose the tax relief? Do I have to pay anything back? Can I at least use the loss?
The rules are layered and have changed several times, most recently with the 2023 annual competition law (L. 193/2024). This article is general information, not tax advice: before any decision, check your specific position, year by year, with your accountant (commercialista).
In brief
- Individuals can choose between two alternative incentives: the ordinary 30% tax credit (art. 29, DL 179/2012) and the "de minimis" credit (art. 29-bis), raised from 50% to 65% for investments made from 1 January 2025, on up to €100,000 a year.
- The investment must be held for at least three years. A sale (even partial) for consideration, a capital reduction or distribution of reserves, or the investor's withdrawal or exclusion makes the relief lapse.
- When relief lapses, you repay the credit already used plus statutory interest, by increasing your tax for the year the event happens.
- What happens if the company is liquidated within the three years is not settled in a single clear rule: check it with your accountant.
- Capital losses on shares you sell can offset capital gains in the same category for up to four following tax years, if reported in your tax return.
- This is why many investors prefer an orderly relaunch to a rushed closure.
The two tax credit regimes
Ordinary regime (art. 29, DL 179/2012). An individual who invests in the share capital of an innovative startup can deduct 30% of the amount invested from their IRPEF, on up to €1 million of eligible investment per tax year. The implementing rules are in the interministerial decree of 7 May 2019.
"De minimis" regime (art. 29-bis, DL 179/2012). As an alternative, the credit is higher but counts towards the startup's de minimis state aid ceiling:
- 50% for investments made up to 2024;
- 65% for investments from 1 January 2025, under art. 31 of L. 193/2024;
- a cap of €100,000 invested per tax year;
- from 2025, only for startups in their first three years of registration in the special section of the Companies Register;
- the application is filed by the startup's legal representative on the Ministry of Enterprise (MIMIT) platform, under the interministerial decree of 28 December 2020.
From 2025, neither regime applies if the investment takes the investor above 25% of the capital or governance rights, or if the investor is also a supplier to the startup above certain thresholds. L. 162/2024 also provides that any part of the de minimis credit exceeding the tax due becomes a tax credit.
The rates depend on the year you invested. An investment made in 2022 follows the rules in force then, not today's.
The three-year holding period and clawback
The relief depends on holding the investment for at least three years. The implementing decree (art. 6 of the decree of 7 May 2019, repeated word for word in art. 7 of the decree of 28 December 2020) lists the events that, if they happen within three years, cause the relief to lapse:
- a sale for consideration, even partial, of the shares received;
- a capital reduction or a distribution of reserves or other funds built from share premiums;
- the investor's withdrawal or exclusion;
- the loss of the innovative startup requirements, with some exceptions.
According to the decree, gifts, transfers on death and transfers arising from corporate reorganisations do not trigger clawback. According to an analysis published by EconomyUp, some cases of losing the requirements don't either: exceeding the turnover threshold, listing on a multilateral trading facility, the natural expiry of the period in the regime, or qualifying as an innovative SME (PMI innovativa).
What you repay. In the year the relief lapses, the investor adds to their gross tax an amount equal to the credit used in previous years, plus statutory interest. This is the mechanism the Italian Revenue Agency applied in its ruling no. 390 of 2023.
Drag-along. In that ruling the Agency also treated the forced exit of a minority shareholder under a drag-along clause as clawback, equating it with withdrawal or exclusion. According to EC News, L. 193/2024 (art. 31) later ruled out clawback when the sale happens for reasons beyond the taxpayer's control. For any transaction like this, have your accountant confirm the reading before you sign.
What if the startup is liquidated within three years?
Here the sources do not give a single clear answer. An expert answer published by PMI.it in 2020 argued that closing the company is not one of the clawback events, so credits already used need not be repaid. On the other hand, losing the startup requirements is a clawback event, and a 2019 opinion from the Ministry of Economic Development (reported by NT+ Fisco) says that a startup in liquidation should normally be removed from the special section, unless there is a prospect of business continuity. Any distribution of money to shareholders during liquidation also needs a careful look.
In short: if the startup is close to liquidation and investors are still inside the three-year window, this is one of the cases where you really should check with your accountant before the resolution, because the timing of the closure can make a difference.
Losing innovative startup status
The status is not permanent. After L. 193/2024, the standard stay in the special section is three years, extendable to five if certain targets are met (for example higher R&D spending, a patent, revenue or headcount growth above 50%, or a qualifying capital increase), with further extensions for scale-ups. Transitional deadlines applied to startups already registered.
When the requirements are no longer met, the company is removed from the special section but carries on as an ordinary srl. The main consequences:
- new investments no longer qualify for the startup incentives;
- if it qualifies, the company can register in the innovative SME section;
- for existing investors, the key question is whether the loss of status is a clawback event or falls under one of the exceptions above.
Capital losses: can you use the loss?
For an individual who does not hold the shares as part of a business, selling them below cost produces a capital loss classed as "miscellaneous income" (redditi diversi). Under art. 68(5) of the Italian income tax code (TUIR), capital losses offset capital gains in the same category, and any excess can be carried forward to no later than the fourth following tax year, provided it is reported in the tax return for the year it arose.
Two points to watch:
- a loss arising not from a sale but from the liquidation and removal of the company is treated according to the specific facts: get your accountant involved;
- there are exemption regimes for capital gains on shares in innovative startups and SMEs (most recently art. 4 of L. 162/2024). If a gain would have been exempt, check how the matching loss is treated.
Why investors often prefer a relaunch
From the investor's side, a closure within three years can mean losing the capital and, in some cases, risking repayment of the tax credit. An orderly relaunch, even with dilution, has some advantages:
- the shareholding stays alive, and so does the holding period;
- the value already built (code, customers, data) is kept rather than sold off cheaply;
- a future exit at a higher value remains possible.
A relaunch still needs careful design. A capital increase to bring in new shareholders does not, by itself, touch existing shares, while a capital reduction, a withdrawal or a sale of investors' shares are among the events to check. Before signing, ask your accountant about the impact on each investor.
PATAVIUM Restart
PATAVIUM Restart confidentially reviews startups that stalled after their first round, talking to both founders and investors, and when the conditions are right joins as an operating cofounder in exchange for equity. If you are an angel investor and a startup you backed has stalled, see how it works at patavium.tech/en/startup-restart, or write to us confidentially from the contact page.
Sources
- DL 179/2012, art. 29 and art. 29-bis – Normattiva
- Law no. 193 of 16 December 2024, 2023 annual market and competition law (arts. 28-33) – Normattiva
- Italian Revenue Agency, Ruling no. 390/2023 (text of art. 6 of the decree of 7 May 2019 and art. 7 of the decree of 28 December 2020, clawback and recovery)
- EC News, Ancora novità per gli investimenti in start up e PMI innovative and Start-up innovative: la detrazione "de minimis" tra aperture e nuove restrizioni
- Orrick, Startup e Innovazione: le novità per il 2025
- Edotto, Start up e PMI innovative. Incentivi fiscali all'investimento and Detrazione al 65%: domanda al MIMIT
- EconomyUp, Quali sono le ipotesi di decadenza dalle agevolazioni fiscali per gli investitori in startup innovative
- NT+ Fisco (Il Sole 24 Ore), La start up innovativa in stato di liquidazione può restare nel registro (MISE opinion no. 133793 of 27 May 2019)
- PMI.it, Startup in liquidazione: detrazione a rischio?
- TUIR, art. 68 (capital gains and losses) – Brocardi.it