All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Italy: New tax incentives for cultural activities and tourism sectors

foglia.jpg

valva.jpg

Giuliano Foglia


Giovanni d’Ayala Valva

The Italian Government has introduced a new set of rules providing for tax, financial and administrative measures aimed at the protection and promotion of national cultural patrimony and of the tourism industry. Indeed the conversion into law of Law Decree No 83 of May 31 2014 (so called Culture Decree converted into Law No 106 of July 29 2014) is a significant change of gear in certain key areas providing new models of collaboration in financing Italian cultural activities and tourism sectors.

One of the most significant tax related measures is the introduction of a tax credit – dubbed the Art Bonus – to encourage private donations to support culture and arts during fiscal years 2014, 2015 and 2016.

In particular, the Culture Decree grants to resident and non-resident taxpayers (including permanent establishments of non-resident taxpayers) a tax credit for contributions made to maintain, protect and restore Italy's public heritage, to support cultural institutions and public sites or to renovate and expand lyrical symphony foundations and other non-profit cultural institutions. Such tax credit is granted also if the beneficiary of the donation is a "concessionaire".

The tax credit is equal to 65% of the contributions made for tax years 2014 and 2015 and to 50% of the contributions made for tax year 2016.

The maximum amount of tax credit granted to individuals and non-commercial entities is capped at 15% of their annual taxable income. For companies and other taxpayers engaged in an entrepreneurial activity, the tax credit is capped at 0.5% of their annual revenues.

The tax credit must be equally spread over three fiscal years and can be used, also through the "compensation procedure", without the ordinary limitation provided by the Italian tax laws.

In addition, to further attract foreign investments in Italy, the Culture Decree provides for tax measures to boost films production in Italy.

In particular, the Culture Decree: (i) confirms the tax relief available at 25% of the production costs; and (ii) raises from €5 million ($6.4 million) to €10 million the maximum amount of tax credit available to be granted to film producers, distributors and technicians for costs incurred in Italy. The overall tax credit available for the cinema and audiovisual industry is also increased from €110 million annually to €115 million.

Finally, to enforce the competitiveness of the Italian tourism sector, the Culture Decree introduces, for fiscal years 2014, 2015 and 2016 and up to certain amounts, a tax credit of 30% of the expenses incurred (i) in the modernisation and digitalisation of the tourism services (for example, expenses related to wi-fi services, optimisation of mobile communications website, marketing and online advertisement), and (ii) in the renovation and improvement of existing hotels (an upcoming Ministerial Decree will set forth the admission procedures).

Giuliano Foglia (foglia@virtax.it) and Giovanni d'Ayala Valva (dayala@virtax.it)

Tremonti Vitali Romagnoli Piccardi e Associati

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

Website: www.virtax.it

more across site & bottom lb ros

More from across our site

Corporations risk creating administrative obstacles if the pillar two rule is implemented too soon, sources say.
Important dates for the Women in Business Law Awards 2023
The Italian government published plans to levy capital gains tax on cryptocurrency transactions, while Brazil and the UK signed a new tax treaty.
Multinational companies fear the scrutiny of aggressive tax audits may be overstepping the mark on transfer pricing methodology.
Standardisation and outsourcing are two possible solutions amid increasing regulations and scrutiny on transfer pricing, say sources.
Inaugural awards announces winners
The UN’s decision to seek a leadership role in global tax policy could be a crucial turning point but won’t be the end of the OECD, say tax experts.
The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.