A significant result achieved by our Firm in a tax audit concerning tax incentives for investments in innovative start-ups.

The Italian Revenue Agency (Agenzia delle Entrate) has closed a proposed tax assessment challenging a taxpayer’s entitlement to tax deductions for investments in the share capital of innovative start-ups under Article 29 of Italian Decree-Law No. 179/2012.

The dispute concerned an investment made in 2020 and could have resulted in the recovery of more than €50,000 in taxes, plus penalties and interest, bringing the total potential tax claim to over €96,000.

The Italian Revenue Agency’s Challenge

According to the Italian Revenue Agency’s initial assessment, the company receiving the investment allegedly failed to meet the substantive requirements for innovative start-up status, as its business venture drew on the founder’s previous professional experience and involved the use of an existing trademark.

On these grounds, the tax authorities sought to disallow the tax deduction claimed by the investor.

Rogai &Partners’ Defence

Rogai & Partners prepared detailed written representations and counterarguments as part of the pre-assessment consultation procedure provided for under Article 6-bis of the Italian Taxpayer’s Statute of Rights.

The Firm’s defence focused on a key distinction: the prior existence of technical expertise, projects and trademarks does not, in itself, preclude the establishment of a genuinely new and innovative business venture.

Through a thorough analysis of the applicable legislation, relevant case law, and the company’s technical and corporate documentation, the Firm demonstrated that the founder’s previous professional experience did not, in itself, undermine the innovative nature of the new venture.

Particular emphasis was placed on providing evidence of the company’s actual research and development activities, the development of new technologies, patent filings, and its financial and operational independence.

The Outcome: Proposed Tax Assessment Dropped

Following the representations submitted by Rogai & Partners, the Italian Revenue Agency closed the case without issuing a formal tax assessment notice, thereby avoiding subsequent tax litigation.

This case highlights the importance of a timely, technically sound and well-documented defence, particularly during the pre-assessment consultation stage.

For innovative businesses and their investors, a sound understanding of the applicable tax incentive framework, supported by a thorough assessment of the relevant facts, can be crucial in protecting tax benefits to which they are lawfully entitled.

Rogai & Partners advises businesses and individual taxpayers on tax planning, the management of tax audits conducted by the Italian tax authorities, and representation in both pre-litigation and tax litigation proceedings.