Italy's Revenue Agency confirmed via Response no. 137 that Simple Agreements for Future Equity (SAFE) contracts qualify as convertible investments eligible for the 65% IRPEF deduction under Article 29-bis of Legislative Decree no. 179/2012, with Law No. 193/2024 allowing investors to claim the relief upon payment rather than waiting for actual conversion into shares, provided the startup is within three years of its initial registration.
Italy’s Revenue Agency has clarified on 8 July 2026 that Simple Agreements for Future Equity (SAFE) contracts used by early-stage startups meet the definition of “convertible investments” and therefore qualify for the 65% individual income tax deduction under Article 29-bis of Legislative Decree no. 179/2012.
The ruling, issued as Response no. 137 on 8 July 2026, confirms what changed in 2024: investors can claim the tax relief immediately when they transfer funds, not years later when the SAFE converts to actual shares.
What qualifies as convertible
A SAFE is a financing agreement where an investor pays capital into a startup without receiving shares outright. Instead, the investor gains the right to become a shareholder at a future date, typically when the startup raises additional capital, takes on new investors, or meets other contractual triggers. The investor accepts the financial risk but receives no interest payments or repayment guarantee from the company.
The Revenue Agency treats this as a bona fide convertible investment because the money flows into company assets and the investor bears immediate loss risk while share ownership remains deferred.
Deduction accrues at payment, not conversion
Law No. 193/2024 rewrote the timing rules. Under the old Ministerial Decree of 28 December 2020, investors only claimed the 65% IRPEF deduction once the SAFE actually converted to shares.
The new law moved the relief to the moment of payment. The company must record the funds in a dedicated equity reserve and complete a bank transfer with documentation tying it to the SAFE contract, but the investor’s tax benefit vests immediately. The deduction remains intact even if the conversion trigger never occurs or if the company uses the reserve to cover losses. The tax relief only disappears if the company returns the invested sums to the investor before the minimum holding period expires.
This applies only to startups within three years of their first registration in the special startup section of the Company Register and that operate under the de minimis aid ceiling.
