The new draft budget plan, the so-called 'Stability Law for
2018', launched in the past few weeks by the Italian
government, defines the lines of public finance for next year
and focuses on important fiscal and spending measures.
The Stability Law for 2018 will come into force in January
and introduces measures and tax incentives for companies that
are in the process of being approved. Below is an overview of
the main measures.
Tax credit for training costs relating to Industry 4.0
With the new budget law, the Italian government puts the
programme for industry in the foreground and continues to
invest billions to extend the concept of Industry 4.0.
In particular, incentives for training costs in "activity
4.0" come to fruition for businesses through recognition that
all companies which, starting from 2018, invest in innovative
training earn a tax credit of 40% of the amounts incurred for
expenses related to the sole cost of the employee for the
period in which he/she is engaged in training activities
pertaining to R&D projects.
Therefore, eligibility for the tax credit can only be
obtained on the activities carried out to acquire or
consolidate the knowledge of the technologies provided by the
National Enterprise Plan 4.0 such as cybersecurity and big
data, cloud and fog computing, robotics and internet of things
and digital integration of business processes and similar.
The tax credit is recognised up to a maximum annual amount
of €300,000 ($356,000) for each beneficiary.
Web tax on dematerialised assets
Waiting for an international consensus, Italy is going to
introduce – starting from 2019 – a tax on
fully dematerialised services offered by non-resident companies
to resident persons in Italy, i.e. business to business and
business to consumer.
The web tax will be 6% of revenues and will specifically
affect revenues generated in Italy by digital multinationals,
ranging from e-commerce to online advertising that use
platforms and digital applications, have virtual stores and
collect personal data. A decree of the Ministry of Finance will
be delivered by April 30 2018 and is expected to clarify the
activities that will be the subject to this new tax (e.g.
border between sale of services vs. sale of goods).
In general terms, the envisaged mechanism provides that
banks and financial intermediaries will act as tax substitutes,
withholding 6% of the price paid by the client (service
receiver) on behalf of the Italian tax administration, so
paying directly to the service provider 94% of the amount due
by the client. These provisions will apply only to those
operators that will exceed specific thresholds in terms of
number of transactions (1,500 transactions per semester) and
overall value (not less than €1.5 million).
Extension of super-amortisation and hyper-amortisation to
Along with the Industry 4.0 chapter, the 2018 fiscal
incentive known as "super- amortisation" is re-confirmed, which
is the third year of application, but at a rate decreased from
140% to 130%.
This incentive facilitates investments in new equipment,
plant and machinery investments made by companies (including
self-employed workers). The extension to investments made in
2018, providing for the possibility of receiving the goods to
be delivered by June 30 2019, is subject to payment of a
deposit of at least 20% of the amount of the asset by 2018.
It also prolongs the "hyper-amortisation" of 250% for high
digitised assets, for purchases made in 2018 and with the
obligation of a payment of a deposit of 20% and then get the
goods delivered by 2019.
Likewise, hyper-amortisation of 140% of intangible assets
has been extended to 2018. This measure aims to promote the
technological and/or digital transformation processes in
Industry 4.0, and essentially refers to the purchase of
functional goods to digitise production processes and to favour
technology and digital investments in the technological growth
New 2018 Sabatini Law for the purchase of instrumental
The 2018 Stability Law renews the "New Sabatini Law", a
contribution from the Ministry of Finance to facilitate the
purchase of new instrumental goods (tangible assets) aimed at
covering interest on bank financing subscribed to buy
instrumental goods. In particular, the measure refers to
investments related to the purchase or lease of machinery,
equipment, plant and equipment, hardware and software, and
digital technologies. The scope is to facilitate companies to
access business credit and increase the competitiveness of the
country's productive system.
The investment must be no longer than five years, between
€20,000 and €2 million. The Ministry of Finance
contribution is 2.75% for ordinary investments, and rises to
3.575% for investments in digital technologies.
The 2018 Stability Law approved by the government in the
Council of Ministers on October 16 is currently being converted
by Parliament and will be converted into Law by December 31
2017, together with the related Tax Decree (Tax Decree No.
148/2017, published in the official gazette on October 16 2017
and entering into force on the same date).
Even if the characteristics of the most relevant provisions
seem to be already on-track, amendments to the current
provisions presented and brand new initiatives are still
possible to the initial draft presented by the government.
Accordingly, the definitive impact of the measures under
discussion may be first weighted only once the final version
has been converted into law and the relating implementation
decree is approved in the forthcoming months.
Barbara Scampuddu (firstname.lastname@example.org)
and Gian Luca Nieddu (email@example.com)
Tel: +39 02 7780711