2021 Transition Plan 4.0: Extension and Increase

Great news regarding the National Transition Plan 4.0. The 2021 maneuver confirms some decisive points for investors, including its extension to 2022, the adoption of the principle of retroactivity and a increase of about €24 billion.

National Transition Plan 4.0: objectives and timeline

The new National Transition Plan 4.0 aims to support and accompany companies in the process of technological transition – especially digital – and environmental sustainability. The first brick of the Italian Recovery Fund has two main objectives:

  • Encouraging private investments, heavily penalized by the COVID-19 emergency.
  • Ensure stability and certainty for businesses with measures that take effect from November 2020 to June 2023.

The new tax credits are planned for two years and, in order to further help companies, the Ministry of Economy and the Ministry of Development have reached an agreement regarding the extension of the Plan to 2022. In fact, the possibility to benefit from the credit for contracts for the purchase of capital goods defined by 31 December 2022, with the sole payment of one deposit equal to at least 20% of the amount and delivery of the goods in the following six months (therefore, by June 2023 ). In addition, the government has also confirmed the principle of retroactivity of the measure with effect from November 16th 2020.

Good news also as for the timeline of credits and compensation, with greater tax advantages during the year. In particular:

  • For investments in “ex super” capital goods and intangible assets not 4.0 made in 2021 by subjects with revenues or fees of less than 5 million euros, the tax credit is usable in one year;
  • Immediate compensation (from the current year) of credit relating to investments in capital goods;
  • For all tax credits on tangible capital goods, the use of credits is reduced to 3 years instead of the 5 years provided for under current legislation.

Increase in investment rates and ceilings

The maximum ceiling of tax rate and investment for tangible and intangible assets, both 4.0 and not, has been increased. Specifically:

Tangible assets 4.0:

  • New rate of 50% in 2021 and 40% in 2022 for expenses of less than 2.5 million euros.
  • New rate of 30% in 2021 and 20% in 2022 for expenses over 2.5 million and less than 10 million euros.
  • New ceiling with a rate of 10% in 2021 and 2022 for expenses exceeding 10 million euros and up to 20 million.

Intangible assets 4.0:

  • Increase from 15% to 20%;
  • Maximum from 700 thousand to 1 million euros.

Non-4.0 tangible and intangible assets:

  • Increase from 6% to 10% for all of the credit for material capital goods (former super) for the year 2021 only;
  • Increase from 6% to 15% for investments made in 2021 for the implementation of agile work;
  • Credit extension to non-4.0 intangible assets with 10% for investments made in 2021 and 6% for investments made in 2022.

An increase from 12% to 20% and a ceiling from 3 million to 4 million euros have also been envisaged for investments in Research and Development. While green and digital innovation sees an increase from 10% to 15%, with a ceiling from 1.5 million to 2 million. Increase from 6% to 10% and ceiling from 1.5 million to 2 million for both technological innovation and design.

Finally, the National Transition Plan 4.0 allows for the extension of the tax credit for employees and entrepreneurs training within the two-year period 2021-2022.