On April 4 2019, Italy’s government approved a
growth decree (decreto crescita) designed to stimulate
economic recovery as well encourage foreign investment by
offering foreign entities the same tax incentives (as well as
subsidised loans and cash grants) available to Italian
enterprises. The decree is comprised of 32 articles and is
divided into the following main sections:
Fiscal measures to foster economic growth;
Measures to relaunch private investment;
Protections for anything "Made in Italy"; and
Other measures to sustain growth.
Pending the final version of the text, the following
measures seek to encourage investment from corporations as
The super and hyper-amortisation measures are aimed at
facilitating business investment by allowing extra-amortisation
on the purchase of certain tangible assets, ultimately in order
to stimulate the renewal of capital goods.
The 2019 Budget Law confirmed the only hyper-amortisation
measure for the whole of 2019, changing the benefit according
to the amount of investment made in order to support small and
medium enterprises. The purchase cost increase applies as
170% for investments up to EUR 2.5 million ($2.8
100% for investments over EUR 2.5 million and up to EUR
10 million; and
50% for investments over EUR 10 million and up to EUR 20
With regard to super-amortisation, the draft edition of the
Growth Decree provides for a return of the incentive measure of
up to 130% for investments in capital goods up to EUR 2.5
million from April 1 2019 to June 30 2020.
Patent box regime
The patent box regime is a tax bonus introduced in order to
improve the development of intellectual property (IP), granting
tax benefits to resident and non-resident taxpayers carrying
out research and development (R&D) activities.
Under this regime, taxpayers can partially exclude up to 50%
from their tax income qualified income derived from the direct
exploitation of intangibles or from licensing of the IP, net of
all IP-relating costs.
In order to obtain this tax bonus, an irrevocable and 5-year
valid option shall be exercised in the tax return and a
negotiation (ruling) shall take place with the tax authorities
in order to define the deductible amount. This ruling procedure
is mandatory to determine the amount of benefited income
arising from the direct exploitation of the qualified
intangible assets. Conversely, it is optional in case of
intangible assets indirect exploitation.
The draft Growth Decree provides for the elimination of
compulsory ruling in case of direct exploitation of the IP and
the simplification of the procedure for determining the tax
benefit deriving from investments in innovation of intangible
Research & development tax credits
The R&D tax credits seek to encourage R&D investment
activities, and it is available to any enterprise. This
includes Italian entities or non-resident taxpayers with
permanent establishments (PE) in Italy performing R&D
activities on the basis of agreements with non-Italian
company’s resident in EU member States, or in a
European Economic Area (EEA) country. It can also apply to
other country partners with which an exchange of information
(EOI) instrument in force.
The size of the tax credit relating to investments in
R&D with the new 2019 Budget Law has largely decreased from
50% to 25%. The maximum annual amount that can be granted to
each company has gone from EUR 20 million to 10 million.
The draft Growth Decree extends the possibility of
benefiting from the incentive by 25% between 2021 and 2023.
For calculation of the expenditure, the average of the
investments in R&D activities carried out in the three tax
periods prior to December 31 2019 will be taken as
New Sabatini law
The new Sabatini law aims at facilitating access to
corporate credit and increasing the competitiveness of the
country's production industry.
The measure supports investments that purchase or lease
machinery, equipment, facilities, production assets and
hardware, as well as software and digital technologies.
The bonus is determined in an amount equal to the value of
the interest calculated. Conventionally, on a 5-year loan for
an amount equal to the investment, at an annual interest rate
These are all confirmed by the draft Growth Decree. However,
the 2 million limit per applicant has been replaced with a new
limit of 4 million.
Furthermore, the verification procedure is simplified with
the admission of self-declarations, and in the case of a loan
of up to EUR 100,000, the contribution is paid in a single
solution, rather than the initial six installments.
||Gian Luca Nieddu
This article was written by Gian Luca Nieddu
(firstname.lastname@example.org) and Barbara
Scampuddu (email@example.com) of Hager