Tax delegation law and the reform of the incentives system

By Vitalba Passarelli, Giovanni Marra and Antonio Maresca

The draft law AS 571 (“Delegation to the Government regarding the revision of the system of incentives for companies, as well as provisions for the simplification of the related procedures”) proposes, among other objectives, an organic renewal of the system of incentives for companies, to improve its effectiveness both from the point of view of economic development and social cohesion.

Art. 2, in particular, establishes the general principles that govern the incentive policies of private investments and their concrete implementation. In this regard, the following general principles are identified:

  • multi-year planning of incentives, in line with the time horizon of the investments and budgeting of adequate financial resources to achieve the objectives;
  • definition of measurable impacts through standard fixed ex ante, ongoing and ex post policy evaluation techniques;
  • coordination between the various administrations involved, in order to maximize the effectiveness of the measures;
  • increase in the awareness of the measures by the user companies, with simple and possibly digital procedures;
  • greater attention to social, economic and territorial cohesion, making the most of female entrepreneurship.

On the basis of these principles, the Government intends to provide for the definition of an incentive system that provides for a recognition and systematization of the existing measures, on the basis of their scope and purpose, with the aim of concentrating the offer and reducing its dispersion (“rationalization of the offer of subsidies”; Art 4).

The above necessarily implies greater coordination between the actors involved (“Coordination with regional incentives”; Art.5), in order to favor a synergistic use of the total available resources and prevent an overlapping of interventions.

To this end, the Government also aims to create a real “incentive code” (Article 6) which dictates the perimeter and guidelines for the Government’s action by regulating administrative procedures, standardizing the criteria, defining the minimum contents of the measures (e.g. notices or directives) and setting guidelines for the evaluation.

The final provisions, contained in Article 7 “Digitization, modernization and de-bureaucratization of incentives”, provide for a simplification of procedures through:

  • obligation of legal publicity on the internet of all measures, as well as the creation of an electronic platform for the collection of the most relevant information (available on the “” website);
  • signing of protocols between the public administrations for the accelerated release of the certifications necessary for the disbursement of the subsidy; these procedures would also extend to the single document of social security compliance and anti-mafia certifications.
The study published by Bank of Italy

In this context, it should be noted that the Bank of Italy has published a Memorandum, presented for the 9th Permanent Commission of the Senate, which carries out a historical-economic analysis on the implementation of industrial policies in Italy from the pre-pandemic period to today, focusing on the progressive construction of a system of aid aimed at supporting the Italian productive fabric and highlighting a certain degree of inefficiency in the allocation of public resources, when compared with the average of other European countries.

Bankitalia deems the general principles of the delegation law acceptable and underlines the importance of the stability and certainty of incentive regulations, important elements in the context of strategic choices by companies in relation to investments, reiterating that, if implemented effectively, the simplification of procedures could broaden the base of companies that can benefit from the support measures, thus generating a greater macroeconomic impact.

Another positive aspect of the delegation law relates to the rationalization of the offer of incentives, which provides for their recognition and systematization mentioned in Article 4. According to the Bank of Italy, the latter is a crucial aspect in the light of the extreme fragmentation that characterizes the aid system in Italy. The current stratification by purpose, different access methods and often of limited amount, according to the study ends up reducing the effectiveness of the measures and limits their ability to cover strategic areas.

Lastly, according to Bankitalia – although significant difficulties could emerge from the implementation of these principles – it is important to underline how the formation of an “incentive code” will represent a novelty such as to allow the harmonization of administrative procedures for incentive interventions also at to identify the best practices that the various administrations involved will have to adopt.

Further programmatic considerations

Firstly, in the context of harmonizing principles, it is important to consider the ongoing evolution of European state aid legislation. The European Commission is working to simplify aid authorization regimes, giving them a key role in financing the ongoing transition. In this context, the new “incentive code” could include provisions for the automatic transposition of the European guidelines without further criteria. This would mean that the rules and guidelines established at European level would be incorporated into the national incentive system without the need for further evaluation or additional criteria.

This harmonization would be part of a broader framework, which takes into account the evolution of European legislation on state aid and aims to ensure greater coherence and cohesion in the context of business incentives.

Secondly, the principles of the bill should also bind regional legislators to avoid restrictions on competition resulting from non-harmonized legislation. State legislative competence in the field of competition protection is recognized as transversal by the Constitutional Court, therefore the principles of the delegation law must be applied consistently at the regional level.

Thirdly, it is essential that any incentive evaluation activity is based on clear, measurable and observable objectives during and after the validity period of the financial support. This principle of measurability of the effects would make it possible to accurately evaluate the impact of the incentives and verify their effectiveness.

To this end, it is important to ensure the interoperability of already existing administrative databases. This means that the different data sources should be able to communicate with each other efficiently, without adding significant statistical burden to the incentive providers or beneficiaries. This would facilitate an easier and more accurate assessment of the effects of incentives, without overburdening the parties involved.

Finally, using digitization to collect business data could lead to the creation of a database of administrative information. This would have the aim of simplifying procedures for both companies and public administration, allowing more efficient management of information.

In conclusion, the reorganization of the incentive regulations assumes an important role in promoting the structural change of the country system. However, it is important to consider how this reform should be inserted into a broader context of changes that involve the tax system, the functioning of the markets and public administrations, with the aim of improving the economic and institutional context in which companies they operate.

For a deeper discussion, please contact:

Vitalba Passarelli

PwC TLS Avvocati e Commercialisti


Giovanni Marra

PwC TLS Avvocati e Commercialisti