The objective of the Italian scheme, also known as the Tecno-Tremonti Law is to promote synergies between small and medium enterprises in undertaking innovative investment in information technology.

The scheme allows SMEs to pool their resources and join newly created consortia of at least 10 undertakings to invest in realising information technology innovative projects, and will be in force until the end of 2004, with an estimated budget of €208 million

Under the auspices of the newly approved tax break, the Italian Treasury will exclude from the taxable incomes of participating SMEs a variable amount totalling up to 40% of the costs incurred to realise such projects.

According to the EC, the scheme constitutes an important pillar of Italy’s package to stimulate the economy included in its 2004 budget law, and has been notified to the Commission as aid for research and development in favour of SMEs.