How does the tax credit for capital goods, which replaced Super- and Hyper-amortisation last year, change?

One of the novelties of the budgetary law 2022,  law 234/2021, which intervenes on the matter with paragraph 44, amending and supplementing Article 1, paragraph 1051 et seq., Budget Law 2021 (l. 178/2020) is the extension, until 31 December 2025 (or, under certain conditions, until 30 June 2026) of the model “Industry 4.0” for the purchase of goods functional to the technological and digital transformation of enterprises and related intangible assets, such as software, systems and system integration, platforms and applications.

*summary table in Italian by Agenzia delle Entrate Bonus Beni Strumentali

 

Tangible assets

Incentives for investments in new tangible assets have been extended for another three years (from 2023 to 2025), albeit with a lower intensity.

All companies resident in Italy are eligible. The benefit is subject to compliance with safety regulations in the workplace and the correct payment of social security contributions for workers.

Excluded are companies subject to disqualification sanctions (Article 9(2) of Legislative Decree No 231/2001) and those in voluntary liquidation, bankruptcy, compulsory administrative liquidation, composition with creditors without business continuity or other insolvency proceedings provided for by the Bankruptcy Law, the Business Crisis and Insolvency Code or other special laws, or that are in the process of declaring one of these situations.

The following are not eligible assets

  • vehicles and other motorised means of transport indicated in Article 164, paragraph 1, Tuir;
  • assets for which the Mef decree of 31 December 1988 establishes depreciation coefficients for tax purposes lower than 6.5%;
  • buildings and constructions;
  • the assets listed in Annex 3 of Law 208/2015, such as pipelines used by natural mineral water bottling industries or bathing and spa establishments, pipelines used by industries producing and distributing natural gas, aircraft complete with equipment, rolling stock, railway and tramway equipment;
  • the non-compensated reversionary property of undertakings operating, under concession or at a charge, in the energy, water, transport, infrastructure, postal and telecommunications sectors, in the collection and purification of waste water and in the collection and disposal of waste.

Framework for the year 2022

No change with respect to the 2022 tax period, which was already regulated by the last Budget Law.

Therefore, for investments made up to 31 December 2022 (or up to 30 June 2023, provided that by 31 December 2022 the relevant order is accepted by the seller and the payment of advances for at least 20% of the acquisition cost has taken place), the tax credit is entitled to the extent of:

– 40% of the cost, for the portion of investments up to EUR 2.5 million
– 20%, for the portion of investments over 2.5 million euros and up to 10 million euros
– 10%, for the share over €10 million and up to €20 million, maximum limit of total eligible costs.

Rules for the years 2023-2025

The extension for the following three years enacted by the Budget Law provides for a rescheduling of the tax credit related to investments made from 1 January 2023 until 31 December 2025 (or until 30 June 2026, provided that by 31 December 2025 the order is accepted by the seller and down payments for at least 20% of the acquisition cost have been made).

The bonus is recognised to the extent of:

– 20% of the cost, for the portion of investments up to EUR 2.5 million
– 10%, for the portion of investments over EUR 2.5 million and up to EUR 10 million
– 5%, for the portion exceeding €10 million and up to a maximum limit of €20 million.

Intangible assets

For intangible assets, related to those in tangible assets “Industry 4.0”, the same extension of three years, with progressive reduction of the amount of the bonus.

In particular, expenses for software, systems and system integration, platforms and applications, as well as services related to the use of these assets through cloud computing solutions, are eligible for the share attributable to the competence.

Rules for the year 2022

For the 2022 tax year, the regime set out in the 2021 Budget Law will continue to apply unchanged: the tax credit relating to investments made up to 31 December 2022 (or up to 30 June 2023, provided that by 31 December 2022 the order has been accepted by the seller and down payments of at least 20% have been made) is entitled to 20% of the cost, up to a maximum limit of eligible expenses of €1 million.

Rules for the years 2023-2025

For the three-year extension period, the bonus is confirmed at the same 20% level only for the first tax period (2023), while in the following two periods, subject to the annual maximum limit of €1 million of eligible costs, it is reduced, in each of them, by five percentage points.

Therefore, it is entitled to:

– 20% for investments made up to 31 December 2023 (or up to 30 June 2024, provided that by 31 December 2023 the order has been accepted by the seller and down payments of at least 20% of the purchase cost have been made)
– 15% for investments made up to 31 December 2024 (or up to 30 June 2025, provided that by 31 December 2024 the order and down payment for at least 20% have been completed)
– 10% for investments made until 31 December 2025 (or until 30 June 2026, provided that by 31 December 2025 the order and down payment for at least 20% are finalised).