Industry 4.0 Investment Tax Credit

The new tax break providing a tax credit for investments in new assets.

What is investment tax credit?

This tax credit is a tax relief that replaces the previous super and hyper depreciation allowances with a tax credit for investments in new assets commensurate with their acquisition cost.

The relief is granted to companies making investments in both new tangible assets and new intangible assets intended for premises located in Italy.

Beneficiaries

The new tax credit:

is available to resident businesses (and to those exercising arts and professions, limited to the tax credit replacing the super depreciation) in Italy, including permanent establishments of non-resident entities, regardless of their legal form, sector, size and taxable income assessment;
is not available to companies:
- in liquidation, bankruptcy, compulsory administrative liquidation, composition with creditors without going concern, as well as those having proceedings for the declaration of one of the aforementioned situations;
- recipients of prohibitory sanctions pursuant to Art. 9 (2), Legislative Decree no. 231/2001.

Eligible investments and degree of tax credit

The tax relief concerns investments in new tangible assets, as well as investments in new intangible assets (including expenses for services incurred in connection with the use of the latter assets, through cloud computing solutions, for the portion attributable on an accrual basis).

For technologically advanced tangible assets (Annex A, Law No. 11 December 2016, no. 232 - formerly hyper depreciation):

2022

40% of the cost for the portion of investments up to EUR 2.5 million
20% of the cost for the portion of investments over EUR 2.5 million and up to a total eligible cost limit of EUR 10 million
10% of the cost for the portion of investments between EUR 10 million and up to a total eligible cost limit of EUR 20 million.

From 2023 to 2025

20% of the cost for the portion of investments up to EUR 2.5 million
10% of the cost for the portion of investments over EUR 2.5 million and up to a total eligible cost limit of EUR 10 million
5% of the cost for the portion of investments between EUR 10 million and up to a total eligible cost limit of EUR 20 million.

The tax credit may be extended until 30 June 2026 provided that, by 31 December 2025, the relevant order has been accepted by the seller and down payments of at least 20% of the acquisition cost have been made.

For other tangible assets (formerly Super Depreciation) other than those included in the aforementioned Annex A:

2022 -> 6% up to a maximum of EUR 2 million in eligible costs.

The tax credit may be extended until 30 June 2023 provided that by 31 December 2022 the relevant order has been accepted by the seller and down payments of at least 20% of the acquisition cost have been made.

Technologically advanced intangible assets functional to 4.0 transformation processes (Annex B, Law 11 December 2016, no. 232, as supplemented by Article 1(32) of Law no. 205 of 27 December 2017)

From 2021 to 2023: 20% of the cost up to a maximum of EUR 1 million in eligible costs.

2024: 15% of the cost up to a maximum eligible cost of EUR 1 million.

2025: 10% of the cost up to a maximum eligible cost of EUR 1 million.

Other intangible assets other than those included in Annex B above:

2022: 6% up to a maximum eligible cost of EUR 1 million.

Methods for tax credit use

The tax credit can be used exclusively by offsetting with the F24 form, in 5 equal annual instalments for investments in tangible assets, or 3 instalments for investments in intangible assets, starting from the year following the year in which the interconnection took place for investments in assets.

If the interconnection takes place in a tax period subsequent to the period of entry into operation, the relief (now tax credit) may be utilised for the portion recognised for 'Other Assets' (6%).

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