Growth decree, in force from June 30, 2019. The news 

The so-called ‘growth decree’ – ‘containing urgent provisions for economic growth and for the resolution of specific crisis situations’ – came into force on 30.6.19. Below, the main important news for agro-food chain operators. (1)

The provision under examination provides a series of measures aimed at facilitating business activities and promoting investments in the Italian territory, with particular regard to the economy of the South. The measures – general and specific, including tax-related – are divided into four areas:

– facilitated taxation to encourage the country's economic growth (Chapter I),

– relaunch of private investments in the territory (Chapter II),

– support to  Made in Italy and contrast to the so-called  Italian sounding (Chapter III),

– support for youth employment and the South (Chapter IV).

Growth decree, the tax measures

In the tax field, the growth decree stands out for a series of measures that stimulate purchases of capital goods, reinvestment of profits and investments in SMEs. In particular:

A) reintroduction of the so-called ‘super depreciation’, that is the increase of depreciation on new capital goods. This measure, already in effect for 2018, is thus confirmed for the 2019 fiscal year. Business income holders and professionals who invest in new tangible capital goods can therefore benefit from depreciation at 130% of the purchase cost, including financial leasing fees.

The measure applies to investments made between 1.4.19 and 31.12.19. Extended until 30.6.20, subject to acceptance of the order by the seller and payment of a deposit of at least 20% by 31.12.19. Within a ceiling of 2.5 million euros, excluding investments in vehicles and other means of transport.

B) revision of the 'mini-IRES'. The IRES rate is reduced to 15% on the portion of business profits related solely to the reinvestment of profits. In other words, only operating profits realized from the tax period in progress on 31.12.18 and set aside as reserves are taken into account, excluding those destined for unavailable reserves, within the limits of the net equity increase.

This benefit is extended to individual entrepreneurs, partnerships, and limited partnerships. More generally, to IRPEF taxpayers engaged in business under ordinary accounting. It is also granted in combination with other benefits, except for those that provide for a flat-rate income determination regime and those in favor of third sector entities (which already enjoy a half reduction of IRES).

C) IMU deduction on instrumental assets, progressive increase. From the tax period following the one in progress as of 31.12.22, a progressive increase in the deductibility of IMU on capital goods from business and professional income is arranged. The deductible portion is subject to progressive increase, according to the following brackets: 50% for the tax period following the one in progress as of 31.12.18, 60% for the tax period following the one in progress, respectively, as of 31.12.19 and 31.12.20, 70% in the tax period following the one inperiod in progress as of 31.12.21. Until full deductibility, in the tax period following the one in progress as of 31.12.22.

D) Further measures. Among the other significant provisions in financial matters is the reform of the discipline on loan securitization, with the aim of promoting the market for non-performing loans (non-performing loans) and the establishment of the so-called 'simple fixed capital investment companies' (SIS). These companies, under a simplified regime, must have net assets not exceeding 25 million euros and share capital at least equal to that provided for by article 2327 of the civil code, without resorting to financial leverage, exclusively investing the collected assets directly in SMEs not listed on regulated markets that are in the experimentation, establishment and start-up phase.

Innovative start-ups, support measures and incentives

Concessional loans for the development of new entrepreneurial activities – in agriculture, crafts and industry, tourism, technological innovation and all sectors relevant to the development of youth entrepreneurship – are subject to new provisions. (3) The scope of the incentives provided for in Chapter I is extended (Measures in favor of new entrepreneurship in the sectors of goods production and service provision) and the possibility of combining these incentives with other State aids (including  de minimis).

The access procedure financing is simplified and the maximum duration of subsidized ‘zero rate’ loans for investments increases from 8 to 10 years. Benefits are extended to companies established within 60 months prior to the application submission date (instead of 12 months, as before). The loan amount – which until now could not exceed 75% of eligible expenses – can now reach 90% for companies established between 36 and 60 months. (2) With an increase in the maximum eligible spending cap, inthis last case, from 1.5 to 3 million.

Additional funding – up to a maximum of 50% of costs – is provided to support technological and digital transformation projects aimed at implementing enabling technologies identified in the ‘Impresa 4.0’ plan, for investments equal to or greater than 50,000 euros. Companies eligible for such benefits are those who, at the date of application submission:

1) are registered in the Business Register and have active status,
2) operate primarily in the manufacturing sector or provide related services. Experimentally, for the years 2019-2020, the facilitated regime is extended to the tourism sector for companies engaged in the digitalization of cultural heritage access,
3) have achieved revenues of at least 100,000 euros in the fiscal year to which the latest approved and filed financial statement refers,
4) have approved and filed at least two financial statements,
5) are not subject to insolvency proceedings nor are in bankruptcy, voluntary liquidation, controlled administration, preventive agreement or any similar condition.

Eligible projects for the benefit can also be jointly submitted by multiple companies – up to 10, grouped through network contracts, consortia,  etc. – where a company acts as the lead entity  Digital Innovator Hub (DIH) or a Digital Ecosystem for Innovation (EDI).

Incentives for the growth of human and economic resources in Italy

A series of benefits and incentives are provided to promote the recovery of investments and hiring in Italy. Particular attention is given to the Southern Regions, which in recent years have experienced a new wave of migration – of brains and arms – due to economic crisis and unemployment. Among the most notable measures, the following stand out:

1) contribution incentives towards those who hire young graduates from upper secondary schools with technical or vocational education programs, including agricultural tracks, on a permanent contract basis. The measures apply in favor of those who have promoted, for the same educational institutions, donations aimed at creating, upgrading and modernizing vocational laboratories (in an amount >10,000 euros annually),

2) extension of the social security relief, provided by the so-called ‘Bonus Sud’ to encourage hires in the Southern Regions, including hires already made as of the effective date of the decree (1.1.19). For this purpose, an additional 200 million euros have been allocated to cover the first four months of the current year,

3) benefits in favor of employees, semi-subordinate workers and freelancers, teachers and researchers who choose to transfer their residence to Italy. These benefits require two conditions:

a) the interested party must not have been resident in Italy during the two tax periods preceding the transfer and must commit to residing in Italy for at least two years,

b) the work activity must be mainly carried out within Italian territory.

The benefit also applies to individuals who start a business in Italy, starting from the tax period following the one in progress as of December 31, 2019. An extension of the coverage period of the benefit is also provided for workers with at least one minor or dependent child, including foster care. As well as for workers who, following their transfer to Italy, become owners there of at least one residential property unit,

4) benefits in small municipalities. In order to promote the reopening of businesses operating in the sectors of craftsmanship, tourism, retail trade (including the public administration of food and beverages), services aimed at environmental protection, enjoyment of cultural goods and leisure, some measures are introduced. In favor of subjects who proceed to expand existing commercial establishments – or to reopen businesses closed for at least six months – located in municipalities with a population of up to 20,000 inhabitants.

Selena Travaglio and Dario Dongo

Notes

(1) See D.L. 30.4.19 no. 34, converted with amendments into law on June 28, 2019 no. 58

(2) Within the limits and conditions provided by reg. EU 651/2014, article 17

(3) At last, the new forecasts update those previously introduced by Legislative Decree 185/00