New tax deduction for business angels

From January 2022, you will be able to deduct up to 50% of your expenses from your tax base. However, there is a condition. The relief is related to investing in venture capital funds.

For whom is the relief envisaged?

The project aims to develop the startup market in Poland. It is assumed that with this relief more and more entrepreneurs will invest in VC funds whose task is to support startups in their early stages of development. Therefore, to benefit from the relief, you need to:

• either directly invest in VC funds,
• or use co-investment with VC funds. In this case, part of the funds must come from non-refundable European funds allocated for VC investments in Poland.

How much is the tax relief?

According to the amendments to the Personal Income Tax Act, it will be possible to deduct even 50% of the expenses from the tax base. These expenses must be connected with the purchase or acquisition of shares. Moreover, the rate of the deduction cannot exceed PLN 250 000 in a given tax year.

The relief will be introduced under the Act of 29 October 2021 amending the Personal Income Tax Act, the Corporate Income Tax Act, and certain other acts, which were signed by the President on 15 November 2021.

Will a person investing in an alternative investment company also benefit from the deduction? How to calculate the amount of tax savings? What formalities must be met when applying for the relief? We invite you to contact us! Our lawyers have been dealing with VC and private equity investments for many years. We will answer these and other questions.

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