Prepared by Vitalba Passarelli, Giovanni Marra, Vanessa Zichichi
Law no. 234 of the 30th December 2021 (so–called Stability Law 2022) postponed the main tax credits for businesses, including those for R&D, technological innovation, design, and aesthetic conception and those for the purchase of capital goods 4.0, and it introduced a new Patent Box regime. The main changes are illustrated below.
Tax credit for investments in new capital assets 4.0 (art.1, par. 44)
According to the new provisions, for investments in new tangible assets included in Annex A of Law 232/2016, made from 1st January 2023 and until 31st December 2025, or 30 June 2026, provided that by the 31st December 2025 the purchasing order is accepted by the seller and the buyer has paid an installment of at least 20% of the purchasing cost (requirements for the so-called “reservation” of the incentive), the tax credit is recognized in the following measures:
- 20% of the cost for investments up to 2,5M€;
- 10% of the cost for investments between 2,5M€ and 10M€;
- 5% of the cost for investments between 10M€ and 20M€.
This is essentially a halving of the rates provided for the year 2022, and therefore the maximum overall benefit pass from 3,5M€ for FY 2022 to 1,75M€ for the three-year period 2022-25. The stabilization of the measure is certainly a good opportunity; however, it is hoped that appropriate resources will be identified to ensure that the ceilings can be applied on an annual rather than a three-year basis.
About intangible assets included in Annex B of Law 232/2016 (including expenses for services incurred in connection with the use of cloud computing solutions), Law No. 234/2021 introduced different rates depending on the year of investment. Specifically, for investments made:
- from 16 November 2020 and until 31st December 2023, the tax credit is granted at 20% of the cost, up to a maximum annual limit of eligible costs of 1M€;
- from 1st January 2024 and until 31st December 2024, the tax credit is granted at 15% of the cost, again up to an annual maximum of 1M€;
- from 1st January 2025 and until 31st December 2025, the tax credit is granted at 10% of the cost, again up to an annual maximum of 1M€.
In all cases, there is a 6-month window (until 30 June of the following year) if the conditions for the reservation are met by 31/12 of each year.
The scheme for the year 2022 provided by Law No. 178/2020 remains unchanged, as reported in the newsalert of 13th January 2021. Therefore, the tax credit for investments in ordinary new capital assets, both tangible and intangible (those that do not have the characteristics of the Industry 4.0 model) ends in the current year on 31st December 2022, or 30th June 2023 if the conditions for the reservation of the benefit are met, and therefore enterprises that wishing to take advantage of this measures must hurry to complete the planned investments by the end of the year.
Tax credit for R&D, technological innovation, and other innovation activities (art.1, par. 45)
Art.1, par. 45 of the Stability Law has extended the tax credit for R&D activities until 2031 and the tax credits for technological innovation, design, and aesthetic conception activities until 2025, while progressively reducing the rates. The reduction of the rates is quite significant, it is expected that the legislator’s choice will be to stabilize the measure for the time being – to allow companies to adequately plan their investments – and later to increase the rates through resources to be identified for this purpose.
For the tax period up to 31st December 2022, the tax credit for R&D activities, based on the provisions already in place, is still recognized at the rate of 20% and within the annual ceiling of 4M€, but from the following tax period and up to the tax period up to 31st December 2031, the amount of the incentive decreases to 10% of the eligible expenses, and the annual ceiling of the credit increases to 5M€.
For enterprises operating in the regions Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily (the so-called “Mezzogiorno”) and carrying out R&D activities, including those relating to COVID-19, directly connected with production facilities based in the above-mentioned regions, Law No. 178/2020, art.1, par. 185 – 187, grants also for 2022 a tax credit equal to 25% of eligible expenses for large enterprises, 35% for medium-sized enterprises and 45% for small enterprises.
As a result of the extension, the tax credit for technological innovation, design, and aesthetics conception activities, for the tax period in course as of 31st December 2023, is recognized at the rate of 10% and within the annual maximum limit of 2M€. As from the tax period in course until 31st December 2024 and until the tax period in course until 31st December 2025, the tax credit rate is reduced to 5% while the annual maximum limit of 2M€ remains unchanged.
On the other hand, as regard the tax credit for investments in 4.0 digital innovation projects or for projects aimed at achieving ecological transition objectives, for the tax period in progress as of 31st December 2022, the measure of 15% is confirmed within the annual maximum limit of 2M€, and then it is progressively reduced to 10% for the tax period following the one in course on 31st December 2022, within the annual maximum limit of 4M€, and to 5% for the tax period following the ones in course from 31st December 2023 to 31st December 2025, again within the annual maximum limit of 4M€.
Patent Box (art.1, par. 10 and 11)
Art.1, par. 10 and 11, has made many changes to the rules related to the Patent Box. An initial reform of this institute was carried out by art. 6 of the Decree-Law No. 146/2021, which replaced the previous rules of the Patent Box with a benefit that increased by 90% the R&D costs incurred in relation to intangible assets legally protectable, thus allowing a wider deductibility for IRES and IRAP purposes.
The same Law had also provided that, to access the benefit, only the procedure of self-assessment of the benefit was possible for taxpayers that did not obtained a tax ruling within FY 2020, and compared to the old rules, the ruling option is now no longer contemplated.
Par. 10, letter a) has replaced par. 3 of art. 6 of Decree-Law No. 146/2021, increasing from 90% to 110% the tax deductibility of R&D costs incurred in relation to intangible assets legally protectable and restricting the scope of the incentive, which now applies only to:
- copyrighted software;
- industrial patents;
- drawings and models.
Compared to the previous version of art. 6, however, trademarks and legally protectable know-how (processes, formulas and information relating to industrial, commercial, or scientific experience) are now excluded from the access to the new regime.
Par. 10, letter b) has also replaced art.6, par. 8, modifying the starting period of the new rules and thus clarifying that they apply to Patent Box options exercised during the tax period in course at the date of their entry into force (October 2021) and to subsequent tax periods.
Par. 10, letter c) has abrogated art. 6, par. 9, which provided for the incompatibility between Patent Box and R&D tax credit. Therefore, according to the new wording of the law, taxpayers will be able to take advantage of both the measures (the reduction of taxable income deriving from the Patent Box and the R&D tax credit) for the entire duration of the option.
Par. 10, letter d) has replaced the existing par. 10 and added a new par. 10 bis to art. 6. With the new paragraph, it is established that, with reference to the tax period 2021 (more precisely, the tax period in course on 22nd October 2021, date on which Decree Law 146/2021 came into force) and the subsequent tax periods, the option provided for by the previous rules (art.1, par. 37 to 45 of Law No. 190/2014 and art. 4 of Decree-Law No. 34/2019) can no longer be exercised. The current rules allow those taxpayers who exercised the option for the old Patent Box regime before 22 October 2021 to benefit from the new Patent Box regime, subject to notification to the Italian Revenue Agency. On the other hand, those taxpayers that applied for ruling to the Revenue Agency, or applied for the renewal, and already concluded the agreement with the Revenue Agency, as well as those who applied for the “self-determination” regime, are excluded from the access to the new regime.
The new par. 10 bis also introduces an interesting recapture mechanism on an eight-year basis, providing that, where in one or more tax periods the expenses eligible for the new Patent Box are incurred to create one or more intangible assets falling within the eligible ones, the taxpayer may benefit from the 110% increase of such expenses starting from the tax period in which the intangible assets obtain an industrial patent title. The 110% bonus may not be applied to expenses incurred before the eight-tax year preceding the year in which the intangible assets obtain legal protection.
Finally, par. 11 clarifies that the amendments thus introduced shall apply as from the date of publication of Law 234/2021 in the “Gazzetta Ufficiale”, i.e., 31st December 2021. It will be necessary to wait for the implementing decree for more details on the application of the new discipline.
Tax credit for investments in new capital assets in South of Italy (art.1, par. 175)
Art.1, par. 175, of Law No. 234/2021 amends art. 1, par. 98, of Law No. 208/2015, adjusting the geographical perimeter of application of the tax credit for investments in the “Mezzogiorno” to what was provided by the new Regional Aid Map 2022-2027 approved by the European Commission on 2nd December 2021. By means of this intervention, the Molise region is included among the areas under derogation pursuant to art. 107, par. 3, let. a) of the TFUE and therefore investments in this region can benefit from the higher aid intensity already due to the regions Campania, Puglia, Basilicata, Calabria, Sicily and Sardinia.
The amendment made by the Budget Law 2022 does not concern the maximum aid intensity, for which the reference remains to the previous Regional Aid Map 2014-2020, thus the following rates continues to apply for: 45% for small enterprises, 35% for medium-sized enterprises and 25% for large enterprises. For region Abruzzo, the rates remain as follows: 30% for small enterprises, 20% for medium-sized enterprises and 10% for large enterprises.
This tax incentive concerns investments in tangible assets (plant, machinery, and equipment) made between 1st January 2016 and 31st December 2022. The tax incentive in question can be cumulated, in relation to the same investments, with the tax credit for investments in new capital assets (based on the answers provided by the Italian Revenue Agency to the tax rulings No. 360/2020 and 600/2021).
Tax credit for consultancy expenses related to the quotation of SMEs (art.1, par. 46)
This paragraph extended the tax credit, initially introduced by Law No. 205/2017, in support of SMEs in relation to consultancy expenses incurred for admission to trading in regulated markets or European Multilateral Trading Systems. As a result of the new rules, expenses incurred until 31st December 2022 are eligible, but the maximum amount of the tax credit is reduced from 500K€ to 200K€, with the provision of a national budget equal to 35M€ for the year 2022 and 5M€ for the year 2023.
Incentives not subject to changes by Stability Law 2022
Remain out from the regulatory interventions the tax credit for personnel training activities on 4.0 disciplines and the so-called advertising bonus, for which the rules already in force for FY 2021 will be applicable also in FY 2022, as summarized below.
Advertising Bonus
With reference to the tax credit for advertising investments (the “Advertising Bonus”) the regulatory reference is art. 67, par. 10, 12 and 13 of Decree Law No. 73/2021, converted into Law with amendments by Law No. 106/2021 (the conversion in law of the so-called “Decreto Sostegni Bis”), which extended for the years 2021 and 2022 the exemption regime provided for 2020.
For the year 2022, specifically, the tax credit at hand is granted to taxpayers that make advertising investments in press and on local and national television and radio stations, not participated by the State, in the single measure of 50% of the value of the investments made, and in any case within the limits of de minimis regulations (EU) No. 1407/2013, 1408/2013 and 717/2014, up to a maximum limit of 90M€, which represents an expenditure ceiling, of which 65M€ for advertising investments in daily newspaper and periodicals, both in paper and digital, and 25M€ for advertising investments in local and national tv and radio broadcasters, whether analog or digital, not owned by the State.
From 1st to 31st March 2022, it must be filed the communication for access the tax credit, which represent a reservation of the resources. While, from 1st to 31st January 2023, a substitutive declaration regarding the investments made must be submitted to certify the eligible expenses.
Tax credit for training 4.0
As far the tax credit for personnel training activities on 4.0, the provisions of art.1, par. 1064, letters i) and l) of Law No. 178/2020 remain in force. These provide that the tax credit applies until the tax period ending on 31st December 2022 and the eligible costs are provided for in art. 31, par. 3 of Regulation (EU) No. 651/2014. In brief, the credit is available to all businesses, to the extent of:
- 60% if the training activities are for the benefit of disadvantage or very disadvantaged employees;
- 50% of eligible expenditure and up to an annual limit of 300K€ for micro and small enterprises;
- 40% or 30% respectively for medium and large enterprises, up to an annual ceiling of 250K€.
The following expenses are eligible for the tax credit:
- trainers’ personnel costs, for the hours during which the trainers participate in the training;
- trainers’ and trainees’ operating costs directly relating to the training activities. In this case accommodation costs are excluded, except for the minimum necessary accommodation costs for trainees’ who are qualifies as workers with disabilities;
- costs of advisory services relating to the training activities;
- trainees’ personnel costs and general indirect costs for the hours during which the trainees participate in the training activities;
- costs related to employees participating as trainers or tutors in eligible training activities.
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