The European Commission has approved an Austrian tax incentive for mid-sized business financing companies.
The measure offers tax incentives to private individual investors for investing in early phase companies and innovative small and medium enterprises in their growth phase. Financial intermediaries that participate using Special Purpose Investment Vehicles (SPVs) can benefit from a capital gains exemption, provided that they pay out an equal amount in dividends to the investors.
The Commission said that the measure is in line with EU state aid rules. In particular, the scheme meets the requirements of the Risk Finance Guidelines, as Austria has provided an ex-ante study to identify and explain the specific market failure that the measure addresses.