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Copia-di-Patent-Box-Tax-RegimeProgram to relaunch areas affected by industrial crisis (Law 181/89)
The program is aimed at relaunching industrial activities, safeguarding employment levels, supporting inve- stment programs and entrepreneurial development in areas affected by industrial and sector crises.

Companies set up as joint-stock companies, cooperative societies and consortium companies are eligible for benefits.
Initiatives that are eligible for facilitations are:
• The once that provide for the implementation of production investment programs and / or investment programs for environmental protection, possibly supplemented by projects for the innovation of the organization, with eligible expenses not lower than 1.5 million euro;
• The once that involve an increase in the number of employees of the production unit involved in the investment program.
Incentives are granted in the form of:
• contribution for the purchase of fixed assets,
• direct contribution to the expenditure;
• soft loan.
The soft loan is equal to 50% of eligible investments. The contribution for the purchase of fixed assets and the direct contribution to the expenditure is not less than 3% of the eligible expenditure.
Agreements for Innovation
Companies of any size and with at least two approved financial statements, which carry out industrial, agro-in- dustrial, craft activity or industry services, as well as research activities, can have access to this procedure.
This incentive projects concerning industrial research and experimental development activities aimed at the creation of new products, processes or services or the significant improvement of existing products, processes or services, through the development of one or more of the technologies identified by the European Union Fra- mework Program for research and innovation 2014 – 2020, "Horizon 2020".
For the purposes of access to the incentive provided for by the Ministerial Decree of 24 May 2017 it is necessary that an Agreement for Innovation is defined between the Ministry of Economic Development and the Regions and the Autonomous Provinces involved and / or the proposing subject.
For the activation of the negotiation procedure aimed at defining the Agreement for Innovation, the proposing subject shall submit to the Ministry of Economic Development a project proposal containing at least:
• the name and the size of each proposing subject, as well as a description of the company’s profile, with particular reference to the technical-organizational structure and to the

Notional-Interest-DeductionThe NID regime was introduced in Italy in 2011 to mitigate the difference in the tax treatment applied to com- panies funded with debt versus companies funded with equity and, in general, to encourage Italian businesses to strengthen their equity structure.

While companies leveraged with debt would generally deduct accrued in- terest expenses, NID allows Italian companies and Italian branches of foreign companies funded with equity to deduct a notional expense computed as a percentage of the equity increases occurred after FY 2010. Such amount represents a tax deduction for CIT purposes (not IRAP).
From an operating standpoint, ACE allows the deduction from the overall taxable income of an amount corre- spondent to the notional return of the new equity capital according to the following rules:
• each year equity increases shall be computed compared to the equity as at 31.12.2010;
• for FYs 2011, 2012 and 2013 deduction was calculated as 3% of the equity increases. FY 2014’s rate was 4%, 4.5% for FY 2015 and 4.75% for FY 2016. FY 2017 and 2018’s rates are, respectively, 1.6% and 1.5%;
• equity increases are triggered, mainly, by cash contributions and profits carried forward as well as re- nounce of credits by the shareholders;
• equity decreases consist of reductions of the equity through any kind of assignment in favor of the shareholders (i.e. dividends). Losses are not considered as equity decreases;
• each year, the deduction cannot exceed the amount of the equity of the company at the end of the FY (including the loss /profit of the year);
• the deduction cannot generate a tax loss. Therefore, if the deduction exceeds the taxable income for CIT puposes the difference can either be carried forward to the next FYs or converted into a credit to offset IRAP payments (if due) in the next FYs.

Copia-di-Other-incentivesThe so called “Legge di Bilancio 2018”, has extended to the fiscal year 2018 the “super- amortization” relief and the “hyper- amortization” relief.
The super- amortization relief
The “super- amortization” discipline consists in overestimating, for tax purposes, the investments in tangible fixed assets, finalized between January 1st and December 31st 2018, of 30%. In order to benefit from the relief, the assets could be owned or leased by the company.

As mentioned above, the so called “Legge di Bilancio 2018” has extended the relief, for the investments made:
• by December 31st 2018;
• or by June 30th 2019, provided that by December 31st 2018 the order is accepted by the seller and the advance payments of at least 20% of the acquisition cost has taken place.
In this regard, please note that in order to identify the period in which the investment is realized - and, therefore, whether or not it falls within the facilitated period - the referring rule is art. 109 of the Italian Tax Code. In this respect, please note the company can benefit from the fiscal relief from the entry into operation of the asset pursuant to art. 102 of the Italian Tax Code.
This tax benefit lead to an increase in the capital expenditures incurred by the company, exclusively for tax pur- poses. This leads to a greater annual deductible depreciation, or a greater annual deductible leasing fees, thus, a decrease in taxable income.
In this regard, please note that if during the tax period the benefit is used less than the maximum limit allowed, the unallocated difference cannot be recovered in any way during subsequent tax periods; this differential can only be recovered by using ordinary instruments allowed by the Italian Tax Law such as the CIT return amen- dment.
Subjects benefiting from "super-depreciation" relief are:
• companies and permanent establishment of foreign companies regardless of the legal nature, the size of the business or the economic sector in which they operate;
• professions, even if they carry out their activity in associative form.
The assets subject to relief must be:
• materials;
• instrumental;
• new;
• owned or leased by the company.
Vehicles are not included in the relief.
The hyper- amortization relief
The “hyper-amortization” discipline consists in overestimating the investments in tangible fixed assets, finalized between January 1st and December 31st 2018, of 150%. In order to benefit from the relief, the assets, acquired or leased by the company, must be functional to the company's

Patent-Box-Tax-Regime-2Patent Box aims to promote investments in R&D related to intangible assets allowing an additional tax deduction from CIT arising from use or licensing of certain intangible assets.

Eligible intangible assets: relevant IA are software protected by copyright; patents, business and te- chnical industrial know how; other legally protected IP, such as designs and models.
Tax deduction: the amount of maximum tax deduction is 50% starting from FY 2017 (30% for FY2015 and 40% for FY2016). This percentage is applied to the income linked to the use of the eligible intan- gible assets (or licensing).
The same tax deduction is also granted with reference to Regional Tax on Productive Activities. Patent Box regime is also applicable to capital gain arising from selling of qualified IPs.
Beneficiary: subjects involved for this tax regime are companies, non-resident taxpayers with a per- manent establishment in Italy if they are resident in a country with which Italy has an effective tax in- formation exchange agreement, individual entrepreneurs and other bodies carrying out business activities.
Tax ruling: depending on the use of the eligible assets (“direct” for production or “indirect” by licensing) holders of IP rights are required to improve a tax ruling with the Italian Tax Authority. Indeed, in case of direct use this procedure is mandatory for determining the amount of benefited income arising from the direct exploitation of the eligible assets.
Validity: the election shall be exercised annually and it is irrevocable for 5 years.

Copia-di-Copia-di-Other-incentivesExpat regime (art. 16 D.Lgs. n. 147/2015)
Introduced in 2015 and in force as from 2016, the Italian Expat regime is a favorable tax regime which lowers the taxable base of professional income for expatriates moving to Italy. It aims at attracting in Italy highly qua- lified professionals.

It applies to individuals who hold a degree (university level) and are EU citizens or non-EU citizens whose country of origin has a double tax treaty in force with Italy (in 2016 it was limited to EU citizens only).
In order to be eligible for the regime, the individual must:
• move in Italy and become tax resident of Italy according to domestic law (art. 2 TUIR);
• hold a degree (university level) and have worked as employee or self-employed outside of Italy for at least 24 months, or
• have studied (university level) and graduated abroad.
After arrival, the individual must carry out a professional activity in Italy, either as employee or self-employed, either in the private or in the public sector.
The expat regime is applicable also to individuals (both EU citizens and non-EU citizens as above) who do not hold a degree (university level), provided that they cover management roles or are highly-qualified or highly- specialized. In order to be eligible, the individual must:
• move in Italy and become tax resident of Italy according to domestic law (art. 2 TUIR);
• have not been a tax resident of Italy for 5 years prior to moving to Italy;
• have a professional activity in Italy for at least 183 days over each tax year;
• work for an Italian resident company (also as assignee in Italy from a foreign company);
• cover management roles or be highly-qualified or highly-specialized.
After arrival, the individual must carry out a professional activity in Italy, either as employee or self-employed, in the private sector only.
The application of the expat regime allows to benefit from a lower taxable base, which is, for the fiscal year 2016, 70% of employment income only and, for the fiscal year 2017 onwards, 50% of professional income (both employment and self-employed income).
The benefit lasts for 5 years starting from the first year of tax residency in Italy.
The applicability of the regime terminates if the individual breaks his tax residency in Italy prior to 2 years from the first year of benefit.
Substitute personal income tax regime for new Italian tax residents (art. 24-bis TUIR – income tax code)
This favorable tax regime has recently been introduced in the Italian tax law and is in force as

RD-Tax-Credit-1As of 2015 a tax-credit benefit has been introduced for any research & development (“R&D”) investment activi- ties carried out by companies, starting from the fiscal year following that ending 31 December 2014 and until the fiscal year ending 31 December 2020.

Such benefit is given to all companies irrespectively from their legal status, their economic sector or accounting regime.This tax-benefit is payable under condition that, during the fiscal year in which taxpayers intend to take advan- tage of the tax-credit, at least € 30,000 of R&D costs are incurred.
The main characteristic(s)/requirement(s) of the above specified R&D credit are the following:
• facilitate incremental R&D investments in respect to the supported average-costs during the period 2012-2014;
• facilitate personnel investments, “extra muros”, industrial sole right, equipment and laboratory tools;
• tax rate to determine to R&D tax-credit equal to 50%;
• maximum yearly amount of the tax-credit equal to MLN/€ 20 per taxpayer;
• credit to be used only to offset payments and starting from the fiscal year following that in which it was recognized.
Moreover, the benefit is:
• supplied as an automatic credit (subject to possible future verification); and
• subject to a certification if there is no accounting supervision (if the certification is needed, a further amount of € 5,000 is given for such activity).

 

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