Tax credit

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Tax Credit 2020

The 2020 tax credit is converted into an incentive for private investments in high-technology-content systems and machinery, and is one of the main guidelines of the INDUSTRY 4.0 national plan. It is a Government tax relief that is granted after investing in innovative assets.

The 2020 Tax Credit replaces hyper- and super-depreciation and provides updated regimes with the Italian 2020 Budget Law in the Official Gazette no. 304 of 30/12/2019. All Italian companies with tax offices in Italy, of all types and belonging to all economic sectors, can benefit from it.

This incentive is granted on investments in assets that are functional to the technological and/or digital transformation of companies through Industry 4.0, and are divided into three main categories listed in Annex A of the Italian 2017 Stability Law:

1) operating fixed assets whose functioning is controlled by computerised systems and/or managed by means of suitable sensors and drives;

2) systems for quality assurance and sustainability, including the E-Power device

3) devices for human-machine interaction and for the improvement of ergonomics and workplace safety in a 4.0 logic.

The eligible investments must consist of new assets interconnected with the company production management system, or the supply network.

Tax Credit 2020 rates

To encourage new private investments in technologies, the Italian 2020 Budget Law defined new rates that differ according to the type of investment and are listed below:

– Tax credit amounting to 40% or 20% of the cost, based on the investment amount, for Industry-4.0-related investments;

– Tax credit amounting to 15% of the cost, for investments in digital services and software;

– Tax credit amounting to 6% of the cost, for investments other than the previous ones (former super depreciation).

The 40% and 20% Tax Credit refers to Industry 4.0 assets including the E-Power system, as per the Annex to Law no. 232 of 11 December 2016, and will have two rates:

– Tax credit amounting to 40% of the cost, for investments up to 2.5 million euros;

– Tax credit amounting to 20% of the cost, for investments between 2.5 and 10 million euros

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