The National Industry 4.0 Plan provides for an additional tax credit, up to 50% of investments in research, development and innovation carried out between 2015 and 2020. Since it is easy to get lost in the maze of regulations that have followed each other in the last 6 years, a brief summary of the so-called R&D bonus is proposed.
A tax credit – amounting to 25% or 50%, depending on the type of expenditure – is granted to all companies, of every sector and size, that invest or have invested in R&D. Regardless of the legal form of the company and the chosen accounting system.
R&D Bonus, origins and developments
The incentives for innovation were introduced back in 2013. (1) In the following years there have been numerous amendments, in:
- 2015 Stability Law, (2)
- 2017 Budget Law, (3)
- 'Dignity Decree', (4)
- 2019 Budget Law. (5)
The so-called 'Growth decree’ has substantially confirmed these provisions, also introducing benefits to support R&D projects for companies intending to adopt production reconversion models, with a circular economy approach. (6)
The complete list of the benefits can be consulted on the MISE (Ministry of Economic Development) website, on the page dedicated to this.
R&D Bonus, applicability conditions
All companies – regardless of the legal form, economic sector in which they operate or accounting regime adopted – are eligible for the tax benefits provided by the R&D bonus. These also apply to companies based abroad that have a permanent establishment in Italy or carry out research and development activities on behalf of foreign entities.
The tax credit applies to incremental expenses for investments in research and development activities, carried out and/or to be carried out between 1.1.15 and 3.12.20. The benefit is applied directly on the excess subject to facilitation, up to a maximum amount of 10 million euros for each beneficiary. (7)
The enterprise intending to benefit from the tax relief must prepare a technical report illustrating the project. With all useful information to qualify the activities, as they are eligible for the tax credit, and describe their progress status. (8). The methods of drafting the report and other formal obligations are specified in the Revenue Agency Circular 10.4.19 n. 8. (9)
Bonus R&D, rates 50% and 25%
The benefit is differentiated, from 1.1.19, depending on the context and the type of expenses incurred (10). Applying rates of 50% or 25%, alternatively, depending on the cases:
– R&D carried out directly by the company (intra-muros). In this case, the greater benefit applies to hiring costs of personnel directly engaged in research, with an employment contract (even fixed-term). The lower rate applies instead to excess costs related to administrative staff not directly involved in R&D, as well as collaborations based on different contractual relationships (e.g. VAT numbers, Co.Co.Co.),
– research and development commissioned to third parties (extra-muros). In this case, the 50% tax credit applies to expenses incurred in contracts signed with Universities, research bodies and organizations, start-ups and independent innovative SMEs. The 25% applies instead to agreements made with other subjects.
The purchase of materials, instruments and laboratory equipment – as well as services related to technical skills and industrial property rights – directly used in R&D activities are also subject to the described benefits, according to the indicated criteria. 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 D.L. 23.12.13, no. 145 (so-called Destination Italy plan), art. 3. Converted with amendments into law 21.2.14, no. 9, it was never applied because the implementing decree of the Minister of Economic Development was enacted only on 27.5.15 (in Official Gazette 29.7.15, no. 174)
(2) Cf. Law 23.12.14, no. 190, article 135
(3) Law 11.12.16 no. 232, art. 1, paragraphs 15-16
(4) D.L. 12.7.18 no. 87 (converted into law 9.8.18 no. 96), art. 8
(5) Law 30.12.18 no. 145, art. 1, paragraphs 70-72
(6) D.L. 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, paragraph 70, lett. ‘g’
(9) See https://www.mise.gov.it/index.php/it/incentivi/impresa/credito-d-imposta-r-s
(10) See law 30 December 2018 no. 145, art. 1, paragraph 70, letter ‘a’
(11) Idem supra, letter ‘c’
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT – Food Times) and Égalité.
Lawyer, specialized in intellectual property rights. LL.M. in agri-food law.
