The National Industry 4.0 Plan provides an additional tax credit of up to 50 percent of investments in research, development and innovation made between 2015 and 2020 . Since it is easy to get lost in the maze of regulations that have followed one another over the past 6 years, a brief summary on the so-called R&D bonus is proposed.
A tax credit-amounting to 25 percent or 50 percent, depending on the type of expenditure-is granted to all companies, of all sectors and sizes, that invest or have invested in R&D. Regardless of the legal form of the enterprise and the accounting regime chosen.
Bonus R&D, genesis and developments
Innovation incentives were introduced back in 2013. (1) However, in the years that followed, numerous changes occurred, in:
- 2015 stability law, (2)
- 2017 budget law, (3)
- ‘dignity decree’, (4)
- 2019 budget law. (5)
The so-called ‘growth decree‘ basically confirmed these predictions, while also introducing facilities to support R&D projects for companies that intend to adopt production reconversion models, with a view to the circular economy. (6)
The full list of facilities can be viewed on the MISE (Ministry of Economic Development) website, on the page dedicated to them.
R&D bonus, conditions of applicability
All enterprises-regardless of their legal form, the economic sector in which they operate as well as the accounting regime adopted-are eligible for tax benefits under the R&D bonus. Which also apply to foreign-based companies that have permanent establishments on Italian territory or perform research and development activities on the commission of foreign entities.
The tax credit applies to incremental expenditures for investment in research and development activities, executed and/or to be executed between 1.1.15 and 3.12.20. The benefit is applied directly to the surplus subject to relief, up to a maximum amount of 10 million euros per beneficiary. (7)
An enterprise wishing to take advantage of the tax break must prepare an illustrative technical report of the project. With any useful information to qualify the activities, as eligible for the tax credit, and describe their progress. (8). How the report should be prepared and other formal requirements are specified in Internal Revenue Service Circular 10.4.19 no. 8. (9)
R&D bonus, 50 and 25 percent rates
The relief is differentiated, as of 1.1.19, according to the context and type of expenses incurred (10). Applying the rates of 50% or 25%, alternately, as appropriate:
– R&D carried out directly by the enterprise(intra-muros). In this case, the increased benefit applies to the costs of hiring personnel directly employed in research, with an employment contract (albeit for a fixed term). On the other hand, the lower rate operates on excess costs related to administrative staff not directly involved in R&D, as well as to collaborations based on different contractual relationships (e.g., VAT numbers, Co.Co.),
– Research and development commissioned from third parties (extra-muros). In this case, the 50 percent tax credit applies to expenses incurred in contracts with universities, research institutions and organizations, start-ups and independent innovative SMEs. On the other hand, 25 percent concerns agreements made with other parties.
The purchase of materials, instruments and laboratory equipment-as well as services related to technical expertise and industrial patents-directly used in R&D activities are also subject to the facilities described, according to the criteria indicated. Also with reference to the creation of prototypes or pilot plants for industrial research and experimental development.
Dario Dongo and Selena Travaglio
Notes
(1) See Dec. 23.12.13, no. 145 (so-called Destination Italy plan), Art. 3. Converted with amendments into law 21.2.14, no. 9, never found application because the implementing decree of the Minister of Economic Development did not see the light of day until 5/27/15 (in Official Gazette No. 174, 7/29/15)
(2) Cf. L. 23.12.14, no. 190, Article 135
(3) Law 11.12.16 no. 232, Art. 1, para. 15-16
(4) L.D. 12.7.18 no. 87 (converted into law 9.8.18 no. 96), art. 8
(5) L. 30.12.18 no. 145, Art. 1, para. 70-72
(6) Decree Law No. 30.4.19, no. 34 (converted into law 28.6.19, no. 58), art. 26
(7) Law 145/2018, Art. 1, paragraph 70, letter ‘b’
(8) Law 145/18, Art. 1, para. 70, letter ‘g’
(9) SEE https://www.mise.gov.it/index.php/it/incentivi/impresa/credito-d-imposta-r-s
(10) See Law Dec. 30, 2018 no. 145, Art. 1, para. 70, letter ‘a’
(11) Idem c.s., letter ‘c’
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Lawyer, specializing in intellectual property rights. LL.M. in agri-food law.
