Model 165 is linked to a tax incentive introduced in Personal Income Tax (IRPF).
Its objective is to promote investment in emerging companies (startups) through own funds from individual investors who, in addition to financial capital, provide relevant business or professional experience and knowledge. This incentive is also aimed at those who simply seek to contribute seed capital, such as business angels or local investors.
In this article, we explore in depth what the Model 165 is, who is required to submit it, the deadlines, how to complete it and the penalties for non-compliance.
Through this model, entities communicate to the Tax Agency the individual certifications issued to their partners or participants for the contributions received. In this way, the State ensures the transparency and proper fiscal control, avoiding possible irregularities and facilitating investor access to corresponding tax benefits.
Who is required to file Form 165?
Form 165 must be submitted by all entities that have issued individual certifications to its partners, participants or associates in relation to capital injections made during the corresponding fiscal year.
These certifications are essential to justify such contributions and to allow partners or participants to access established tax incentives. If the entity does not issue these certifications, you will not be required to submit the model, since the information statement is based precisely on the existence of these accreditations.
Main requirements to be able to file Form 165
1. Constitution and type of company
- The company must be established within a maximum period of five years from its registration in the Mercantile Register, extended to seven years in the case of companies in strategic sectors such as biotechnology, energy, industry or those that have developed their own technology entirely in Spain (according to Law 28/2022).
- It must be a Limited Company (SL), Limited Company (SA), or Limited Company or Limited Labor Company.
2. Nature and activity of the company
- The company must be a productive business, that is, it cannot act as Holding nor to have as its main activity the mere management of assets.
- You must develop a specific economic activity and have material and personal means to carry it out, which implies that it must have employees hired as an employee.
3. Financial conditions
- Los own funds of the company must not exceed 400,000€ at the time of the beginning of the financial year in which the investor acquires the shares or shares.
- The company must have made a capital increase with contributions from individuals, who may be able to deduct these contributions in personal income tax.
4. Acquisition of shares or shares
- Shares or shares must be purchased:some text
- At the time of the Constitution of the company, or
- Through a capital increase carried out in the first quinquennium after the constitution (seven years in the above-mentioned strategic sectors).
- The investor must hold these shares or shares in his assets for a period of between Three and twelve years.
5. Limits to investor participation
- The taxpayer cannot control, directly or indirectly, more than 40% of the company's capital. This limit includes the shares of your spouse or relatives up to Second grade of consanguinity or affinity.
6. Deductions for investors
- Since 2023, investors can deduct up to 50% (formerly 30%) of the amounts provided to new or recently created companies.
- The maximum deduction base amounts to 100,000€ per year (before 60,000€).
- Deductible contributions must be made to the company's share capital and be properly certified by the beneficiary entity.
7. Specific projects not eligible
- Deductions are not allowed for investments made in specific vehicles such as SPV (Special Purpose Vehicles).
When should Form 165 be filed?
The filing of Form 165 must be made annually during the month of January, in relation to the certifications issued to partners or participants in the previous year. For example: For certifications corresponding to the 2023 financial year, the deadline for submission will be January 1 to 31, 2024.
Meeting this deadline is essential to avoid administrative sanctions. Late filing could result in significant financial fines, underlining the importance of planning and executing this procedure well in advance.
During the month of January, in addition to the presentation of Model 165, the company must ensure that issue individual certifications. Each certification must specify that capital contributions made by investors comply with established legal requirements, thus allowing for tax deduction in personal income tax. Otherwise, if the company does not submit Form 165 and the partners apply the deduction to their personal income tax, they could face tax problems with the Treasury.
Required Information on Model 165
El Model 165 collects essential data on contributions made by partners or shareholders of new or recently created entities. These data are essential to ensure proper monitoring and to allow members to benefit from the corresponding tax deductions. Including:
1. Identifying data of the issuing entity:
- Name or company name.
- Tax Identification Number (NIF).
- Tax address.
2. Data of the partners or participants:
- Full name.
- Tax Identification Number (NIF) or Foreign Identity Number (NIE).
- Tax address.
3. Details of the contributions:
- Date of the contribution.
- Amount of the contribution.
- Type of contribution (monetary, assets, etc.).
- Generated economic rights, where appropriate.
It is the company's sole responsibility to submit the full list of partners who meet the deduction requirements.
4. Certifications issued:
1. Identification of each certificate issued. These individual certificates must be signed by the company's management body and contain the following information:
- Date of issue of the certificate.
- Company details: company name, CIF, tax address.
- Investor details: full name, NIF/NIE.
- Investment details: amount, date of the transaction, percentage of interest acquired.
2. Attributed tax benefits.
How is the Model 165 presented?
Form 165 must be submitted electronically through the Tax Agency's Electronic Office. The basic steps for your presentation are:
1. Access to the Electronic Office:
- Access the official website of the Tax Agency (www.agenciaria.es).
- Locate the section corresponding to Model 165 within the available options.
2. Completion of the model:
There are several options for completing Form 165:
- Continue: Create a new declaration and manually enter all the required data.
- Import: Upload a file in BOE format (in accordance with the current registration design of model 165). Limit: 40,000 records per file.
- Import from the previous year: Retrieve active record data from the return filed the previous year.
3. Electronic signature:
- It is mandatory to identify with a electronic certificate valid from the declarant or through the system Cl @ve.
In addition to the owner, the model can be submitted by:
- A social collaborator.
- An authorized agent.
4. Shipment of the model:
- Once signed, send the statement. The system will generate a proof of presentation, and it is recommended to keep a copy of the receipt for future inquiries or possible revisions by the Treasury.
After identifying the presenter with a digital signature, in the pop-up window, choose one of the options to access the form:
- Continue. It allows you to register a new declaration by entering all the data. Indicate the taxpayer's NIF and click “Continue”.
- Import. You can import a file in BOE format that follows the current registration design of model 165, obtained with the form itself by exporting the declaration or with a third-party program. The limit of records to be imported will be 40,000;
- Import previous year. The data for the previous year will be imported from the active records of the previous year at the time of the consultation; for this, it is necessary that you access the form with the electronic certificate certificate or electronic DNI of the declarant, the social partner who filed the return the previous year or a proxy who submitted the declaration the previous year or a proxy to consult the declaration. It is not possible to import data from the previous year if the declaration exceeds 40,000 records. Please note that once the declaration is registered, this option will not be available.
Common Errors When Filing Form 165
As it is an informational model with specific details, it is common to make mistakes when filling it out. Some of the most common faults are:
1. Incorrect partner data: Make sure that the names, NIF or NIE, and addresses are up to date and correct.
2. Omission of certifications: All issued certifications must be included, with no exceptions.
3. Errors in the amounts: Verify that the amounts of the contributions match the accounting records and the certifications issued.
4. Late submission: Plan your presentation in advance to avoid fines.
Penalties for non-compliance
Failure to comply with the obligation to submit Form 165 may result in sanctions by the Tax Agency. The main penalties include:
- Penalty for late filing: Depending on the delay, it can range from 200 to 600€, if there is no prior request from the Treasury.
- Penalty for inaccurate or incomplete data: If the information provided is incorrect, there may be a penalty of 20€ for each erroneous data or certificate omitted.
- Penalty for not submitting the model: The total lack of presentation may result in higher fines, calculated based on the damages caused to the administration.
The Treasury Model 165 is a key tool for fiscal transparency in contribution transactions made by partners or shareholders. Although filing requires attention to detail and meeting deadlines, doing so correctly protects entities from sanctions and helps maintain a good tax reputation.
If you are an entity required to submit it, be sure to collect and verify all the required information in advance.
