International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Italy: New decree extends Patent Box regime to commercial trademarks and introduces tax measures for “indirect lending”



Giuliano Foglia

Marco Emma

With the so-called "Investment Compact" decree (Law Decree no. 3 of January 24 2015), the Italian Government introduced certain urgent measures to support the banking system and also to encourage investment. Article 5 of the decree amends the Patent Box to improve its attractiveness, keeping the overall structure of the beneficial regime recently adopted (see our Italy update in the December/January issue).

The most favourable adjustment is to the regime's scope of application: together with patents, formula, process and similar creations of the mind, the discounted tax rate may now apply to any kind of trademarks (including purely commercial ones), designs and models capable of legal protection.

Similarly to the original version of the regime, only taxpayers involved in qualifying research and development (R&D) activities may be admitted to the Patent Box regime. However, the decree now allows that such R&D activities may be also outsourced to any third (unrelated) party and not only to universities or similar research entities, as initially required.

The decree also confirmed that, as per the OECD's nexus approach, only part of the income deriving from intellectual property (IP) would be exempt, based on the ratio of (A) R&D expenses borne to maintain, increase and develop the intangible asset to (B) total expenses sustained for the creation of such IP right. For such purposes, expenses sustained for R&D activities (i) directly carried out by the taxpayers or (ii) outsourced to third (unrelated) parties are fully qualified for the regime. In addition, pursuant to the new decree, expenses (iii) borne for R&D activities outsourced to related entities (intra-group) and those (iv) sustained to acquire IP rights are now also taken into account, although up to the limit of 30% of the sum of the fully eligible R&D expenses under (i) and (ii) above. In other words, costs for IP acquisition and for R&D activities outsourced to related parties now also count for the nexus approach computation, but they would grant a full benefit only if resulting in 30% or less of the other "original" qualifying expenses under (i) and (ii).

Finally, in relation to the Patent Box regime the ruling procedure is no longer compulsory for intra-group transactions but is still necessary in relation to income stemming from direct use of IP rights.

The Investment Compact also includes tax measures to support access to alternative forms of "indirect" foreign financing. In particular, article 6 of the decree extended the scope of application of the exemption from Italian withholding tax to foreign institutional investors participating indirectly to banking financing transactions (that is, institutional investors providing funds to Italian lending banks). Only institutional investors established in "white-list" countries and subject to surveillance therein are able to take advantage of the exemption.

The measures enacted by the decree are in force as from January 25 2014. However, amendments could be passed during the process of conversion of the Decree into law by Parliament. If not converted before March 26, the decree must be deemed as retroactively non-effective.

Giuliano Foglia ( and Marco Emma (

Tremonti Vitali Romagnoli Piccardi e Associati

Tel: +39 06 3218022 (Rome) +39 02 58313707 (Milan)


more across site & bottom lb ros

More from across our site

The Brazilian government may be about to align the country’s unique system with OECD standards, but this is a long-awaited TP reform and success is uncertain.
Two months since EU political agreement on pillar two and few member states have made progress on new national laws, but the arrival of OECD technical guidance should quicken the pace. Ralph Cunningham reports.
It’s one of the great ironies of recent history that a populist Republican may have helped make international tax policy more progressive.
Lawmakers have up to 120 days to decide the future of Brazil’s unique transfer pricing rules, but many taxpayers are wary of radical change.
Shell reports profits of £32.2 billion, prompting calls for higher taxes on energy companies, while the IMF warns Australia to raise taxes to sustain public spending.
Governments now have the final OECD guidance on how to implement the 15% global minimum corporate tax rate.
The Indian company, which is contesting the bill, has a family connection to UK Prime Minister Rishi Sunak – whose government has just been hit by a tax scandal.
Developments included calls for tax reform in Malaysia and the US, concerns about the level of the VAT threshold in the UK, Ukraine’s preparations for EU accession, and more.
A steady stream of countries has announced steps towards implementing pillar two, but Korea has got there first. Ralph Cunningham finds out what tax executives should do next.
The BEPS Monitoring Group has found a rare point of agreement with business bodies advocating an EU-wide one-stop-shop for compliance under BEFIT.