Budget Law 2020 – Tax credit for Research and Development (R&D)
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The Budget Law 2020 in the article 1 par. 198-209 introduce the new R&D tax credit for:
– R&D activities,
– technological innovation activities
– design and aesthetic conception activities.
The credits are set to apply only for 2020 starting from the FY following the one on going on 31 December 2019 and it are introduced depending on the type of expense.
The tax credit applies to all companies resident in Italy, including permanent establishments of non-resident entities.
Under the new provision, the tax credit is applied in three equal annual installments (and no longer in one FY), as of the FY following the one in which the relevant expenses have been incurred.
– R&D activities: the tax credit amounts to 12% of the eligible expenses with a maximum annual amount granted to each company of € 3 million.
– Technological innovation: the tax credit amounts to 6% of the eligible expenses (raised to 10% in the case of ecological transition or if the relevant activity qualifies as a digital innovation under the mentioned Industry 4.0 Plan) with a maximum annual amount granted to each company of €1.5 million.
– Design activities carried out by companies in the textile and fashion, footwear, eyewear, goldsmith, furniture and ceramics sectors, for the design and manufacture of new products and samples: the tax credit amounts to 6% of the eligible expenses with a maximum annual amount granted to each company of €1.5 million.
For both the R&D, the technological innovation and the design tax credits, the incentive amount is determined by applying the credit rate to a set of eligible expenses represented by: personnel expenses, amortization charges (or lease payments) for capital goods (including IP), research contracts with external contractors, consultancy services, raw materials and supplies.
Enterprises would be to certify by technical report that the requirements to benefit from the tax credits are met.
Further implementing rules will be set by a decree from the Ministry of Economic Development.