Italy Tax Agency Clarifies Tax Credits for Investments in Innovative Start-Ups, SMEs for Individuals

The Italian Revenue Agency Feb. 10 issued Letter No. 29/2026, clarifying the tax credit for investments in innovative start-ups and small and medium-sized enterprises (SMEs), for individuals. The taxpayer, a VAT-registered individual under the flat-rate regime, intended to invest in innovative start-ups and SMEs. The taxpayer sought clarification on whether a flat-rate regime taxpayer can claim the credit when the individual isn’t subject to individual income tax (IRPEF), but to substitute tax and the regional tax on productive activities (IRAP). Upon review, the Tax Agency clarified that: 1) the credit applies only when the deduction exceeds the taxpayer’s IRPEF gross ...