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Italy: Tax measures relocating entities, bonus depreciation, R&D tax credit

Italy: Tax measures relocating entities, R&D tax credit

The tax measures in Law Decree no. 87 (published in the official gazette on 13 July 2018) generally are deemed to be effective, but because the law decree itself must be “converted into law,” it is possible that there could be amendments eventually made to the tax provisions contained in the law decree.

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In general, the law decree is being referred to as the “Dignity Decree” because it introduces measures that concern “the dignity of workers and enterprises.” However, the law decree also includes certain tax technical measures. For instance:

  • The law decree addresses measures that aim to restrict or limit the relocation of Italian and foreign enterprises that have received “state aid”—including tax incentives—when such aid may be conditional on the location of the production investment. The state aid ceases if the activity is relocated outside the EU or EEA within five years and in some instances if the activity is moved from one particular site to another side in Italy or the EU/EEA. The law decree defines the term “relocation.” 
  • The law decree limits the scope of a “hyper” (or bonus) depreciation benefit to those assets intended to be used in Italy. This extra depreciation allowance may be revoked if the assets are sold or are intended to be used in production facilities abroad, even if by within the same enterprise group.
  • The research and development (R&D) tax credit regime is limited with respect to purchases or licenses of certain intellectual property (IP) if the seller or licensor belongs to the same corporate group as the taxpayer.
  • The rate of tax imposed on revenue from gaming machines is increased.
  • The deadlines for filing annual “sales and purchases list” (Spesometro) are modified. For instance, the deadline for filing sales data for the third quarter 2018 is postponed to 28 February 2019 (instead of 30 November 2018). 
  • There are limits imposed with regards to the “split payment” regime for services rendered by self-employed individuals.

 

Read a July 2018 report [PDF 386 KB] prepared by the KPMG member firm in Italy

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