Industry 4.0 and New Italian Tax Incentives in 2020

New Industry 4.0 tax incentives in 2020. Starting from January 1st, in Italy the new tax credit for investments in capital goods will replace the previous super-amortization and hyper-amortization. The new amendment proposed by the Ministry of Economic Development introduces many innovations to support companies in their technological and digital transformation process.

In this article we analyze all incentives of the National Industry 4.0 Plan for 2020.

Tax credit for Industry 4.0 2020: what’s new?

As explained by the MiSE (Ministry of Economic Development), the new amendment is a strategic project aimed at supporting companies that invest in integrating new technologies and creating new business models. The goal is to provide fiscal support to promote the technological and digital transformation (or transition) of Italian companies. Especially SMEs, which are the core of the Italian productive fabric.

As for the time-frame, the draft reads as follows: “In order to more effectively support the digital transition process of companies, private spending on research and development and technological innovation, also in the context of circular economy and environmental sustainability, increasing skills in matters related to technologies enabling the technological and digital transition process, as well as rationalizing and stabilizing the reference incentive framework over a multi-year time horizon, compatibly with public finance objectives, is redefined the regulation of tax incentives provided by the Industry 4.0 Plan.” However, as of now these incentives have been confirmed only for one year.

Industry 4.0 tax incentives value

As anticipated, both the super and hyper amortization will be replaced by new tax incentives ranging from 6 to 40%.

  • 6% tax credit for new capital goods up to a maximum investment of 2 million euros.
  • 40% tax credit on investments in technological assets up to 2.5 million euros.
  • 20% tax credit on investments in technological assets between 2.5 and 10 million euros (the are no incentives for investments over € 10 million).
  • 20% tax credit for software up to a maximum investment of 700,000 euros.

The tax credit for investments in goods can be used in compensation in five annual installments starting from the year following the interconnection. While for investment in software, the tax credit can be used in compensation in three annual installments.

Finally, there are new tax incentives also for research and development activities (12% tax credit up to investments of 3 million euros), ecological transition (10%) and technological innovation (6% on a maximum investment of 1.5 million euros).