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Tax Incentives Major Part Of New Italian Industrial Plan

by Ulrika Lomas, Tax-News.com, Brussels

23 September 2016


The EUR37bn (USD41.5bn) "Industria 4.0" plan for digital and technological industrial development in Italy, which was unveiled in Milan on September 21, will be supported by a number of tax incentives.

It is proposed that the existing so-called "super" depreciation allowance of 140 percent, which is currently available for purchases of machinery and equipment in the period to December 31, 2016, will be extended in the Government's 2017 Budget, and a further "hyper" depreciation allowance of 250 percent will be introduced for investments in technology, agrifood, and plant for the improvement of energy consumption.

To provide the maximum incentive, the new depreciation allowance will be available as long as an order for machinery and equipment (and a minimum deposit of 20 percent) is made by December 31, 2017, with subsequent delivery by June 30, 2018.

In addition, the current 25 percent tax credit that is available in respect of qualifying research and development (R&D) expenditure that exceeds a company's average R&D expenditure incurred in the three previous fiscal years, will be increased to 50 percent. The maximum tax credit will rise from EUR5m to EUR20m per company.

The tax deduction for investors in start-ups will be increased from 19 percent to 30 percent for investments per contributor of up to EUR1m (previously EUR500,000), while the limits governing the 10 percent flat rate of income tax available for an employee performing work that increases a company's productivity are also to be increased.

In his remarks during the plan's unveiling, Premier Matteo Renzi confirmed that Italian taxes will continue to fall next year. The Government's 2017 program includes a decrease in the Italian corporate income tax rate from the present 27.5 percent to 24 percent.

TAGS: tax | investment | tax incentives | energy | equity investment | corporation tax | tax credits | food | venture capital | tax rates | Italy | tax breaks | individual income tax | research and development

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