New: The application conditions for Wealth Tax-SME (ISF-PME) reduction have been tightened for all subscriptions dated after 1 January 2016. This reduction now only applies to SMEs that have existed for less than 7 years and investors with no existing affiliation with the company.
Our comments: the Wealth Tax-SME reduction therefore no longer applies to associates and shareholders seeking to invest further in their company, unless this investment is a follow-on investment which has been formalised as part of a business plan. Business plans are not subject to specific formal conditions; for example, this could be a business plan established by the company to obtain funding from lenders and investors. The investor must have access to this when they make their initial investment in the company. It must also include an evaluation of the sizes and maturity dates associated with any future capital increases.
Please note: the condition relating to the existence of a business plan at the time of the initial investment is only applicable to follow-on investments related to initial investments dated after 1 January 2016.