Our Italian member Morri Rossetti presents "Budget Taw Law 2020: Tax incentives for enterprises".
The Budget Law for the year 2020 (Law 27 December 2019, n. 160), published on the Ordinary Supplement n. 45/L of the Official Journal n. 304 of 30 December 2019, entered into force on 1 January 2020, introduced some tax incentives for enterprises.
Tax credit for investments in new capital assets
The new regulation introduced a tax credit for investments in new capital assets instrumental to the exercise of the business activity, purchased from January 1st to December 31st 2020, or within June 30th 2021, provided that within December 31st 2020 the purchasing order is accepted by the seller and the buyer has paid an installment of at least 20% of the whole purchasing price.
This credit replaces the Super and Hyper-depreciation valid in Italy since December 2019.
All companies resident in Italy can benefit of the new tax credit provided that the taxpayer is compliant with the legislation on safety in the workplace and with the payment of the social security contributions.
The following investments are eligible for the tax credit:
a) new «ordinary» material assets;
b) new tangible assets as defined in Annex A of Law n. 232/2016 (Budget Law 2017) (i.e. assets that under the former regulation were eligible for the so-called Hyper-depreciation);
c) new intangible assets as defined in Annex B of Law n. 232/2016 (i.e. software; system and system integration…).
The new tax credit is not applicable for vehicles.
The amount of the tax credit is based on the specific type of the investment made in:
- new «ordinary» material assets: the tax credit is equal to 6% of the eligible costs, for a maximum amount of eligible investments of 2M€;
- tangible assets as defined in Annex A of the Law n. 232/2016: the tax credit is equal to 40% of the eligible cost up to an amount of € 2,5M, and to 20% of the cost incurred, for investments between 2,5M€ and 10M€;
- new intangible assets as defined in Annex B of the Law n. 232/2016: the tax credit is equal to 15% of the cost incurred, up to an amount of 700K€ of eligible expenses.
The tax credit is not subject to Italian personal, corporate and regional tax, it cannot be transferred, even among enterprises belonging to tax consolidation, and it can be used only to offset tax payments through the F24 model, pursuant to art. 17 of the Legislative Decree n. 241/97, as follows:
- 5 annual installments of equal amount for new material assets, both “ordinary” and as defined in Annex A;
- 3 annual installments for intangible assets as defined in Annex B.
from the tax period following the one in which the asset entered into operations.
Please see the document for further information.