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Transcript of #ISVwebinars n°3: Italian Tax Law - Flavio Notari
ROMA
PADOVA
MILANO
VENEZIA
ROME
PADUA
MILAN
VERONA
Flavio Notari
INNOVATIVE STARTUPS
BRIEF GUIDE TO TAXATION
22
Italian Tax System on corporations
Summary
TOPICS
Basics of Corporate
Income Taxation(«IRES»)
Basics of ProductiveActivitiesTaxation(«IRAP»)
Basics of Value
Added Tax
(«VAT»)
Research and Development
Tax Credit
Patent Box
Some Tax
Incentives
available to
startups
33
Tax Standard Rates Notes
Corporate Income tax
IRES27,5%
Starting from 2017 the
rate will be reduced to
24%
Productive Activities
Taxation
IRAP
3,9%Plus increases settled by
the specific Region
Value Added Tax
VAT22%
With reduced rates (equal
to 10% or 4%) for specific
products
Italian Tax System on corporations
The rates
44
CORPORATE INCOME TAXATION
55
Corporate income tax is governed by the Income Tax Code («Testo unico delle
imposte sui redditi», Tuir), which was enacted by Presidential Decree 22 December
1986, no.917.
Corporate income tax
All income derived by corporations that carry on business activities is considered
“business income” and is subject to corporate income tax (IRES), pursuant to
article 83 of the Tuir.
66
Corporate income tax applies to resident and non-resident companies:
� Resident companies are taxed on their worldwide income but may elect to
exempt the income derived through foreign permanent establishments.
� Non-resident entities are subject to Italian tax only on Italian-source income.
Corporate income tax
77
A company is considered fiscally resident in
Italy if has, alternatively,
its registered office
(or legal seat)
place of effective
management
main business
purpose
in Italy for the greater part of the
fiscal year.
Corporate income tax
Residence
88
• Financial Statements «derivation» principle
• Adjustments
• Exemptions
• Depreciation and Amortization
• Rates
Corporate income tax
Taxable income
99
The taxable base is the worldwide income shown on the Income Statement prepared
for the relevant fiscal year according to company law rules and adjusted according to
the tax law provisions concerning business income.
The taxable period for corporate income tax purposes is the company’s fiscal year as
determined by law or the articles of association. If the fiscal year is not so
determined, or if it is longer than 2 years, the taxable period is the calendar year
(article 76 of the Tuir).
The principle of derivation indicates that the taxable income is determined starting
from the economic result (“Statutory Result”) derived from the approved Financial
Statements of the corporation.
The total taxable income, than, is determined by making to the Statutory Result of
the Financial Statements the increases and/or the decreases resulting from the
application of tax laws.
Corporate income tax
Derivation principle
1010
Business income is generally determined according to the accrual method, but there
are certain exceptions (e.g. dividends and directors’ fees).
The general rule is that, to be deductible for tax purposes, expenses must be
booked in the Income Statement of the relevant fiscal year, pursuant to article 109
of the Tuir.
Corporate income tax
Derivation principle
Cost and other negative items may be deducted if, and to the extent that, they
relate to the business activities or assets that generate gross proceeds or other
positive items that either (i) are included in taxable income or (ii) do not form part
of taxable income becouse they are excluded.
1111
Increases and Decreases are “adjustments” to the Statutory Result that have
essentially the functions of preventing misappropriations of taxable elements.
Corporate income tax
Adjustments
Decreases mean:
costs not ascribed to the Income Statement (for the fiscal year), but
deductible;
revenues ascribed to the Income Statement, but not taxable.
Increases mean:
costs ascribed to the Income Statement, but non-deductible;
revenues not ascribed to the Income Statement, but taxable.
1212
Statutory Result + / -
Increases and Decreases provided
by Tax Laws=
Taxable income * 27,5%
Taxes
Corporate income tax
1313
Costs and other negative items cannot be deducted if, and to the extent that, they
relate to business activities or assets that generate exempt income.
Corporate income tax
Positive Adjustments
• Compensation, in cash or in kind, paid to employees is deductible by thecompany, including the remuneration does not constitute taxable income forthe employee (e.g. small gifts).
• Certain benefits in kind are deductible only in part or not deductible at all.
Employees’ remunerations
• Directors’ fees, including those paid in the form of participation to profits, are fully deductible on a cash basis (article 95 of the Tuir).Directors’ fees
1414
Corporate income tax
Positive Adjustments
• Royalties paid for patents, trademarks, know-howand similar rights are deductible.Royalties
• Service and management fees are deductible.
Service and management
fees
• Research and development expenses aredeductible in the fiscal year in which they areincurred or in equal instalments in that year andthe 4 following years (article 108 of the Tuir).
Research and development
1515
Corporate income tax
Positive Adjustments
•Advertising and other marketing expenses are deductible inthe fiscal year in which they were incurred or in equalinstalments in that year and in the following 4 years.
Advertising and marketing
•Entertainment expenses are deductible to the extent that theyare business related and reasonable. The expenses must beproperly documented and can be deducted only with limitsgiven by a certain percentages of the gross receipts.
Entertainment costs
•Dividends paid are not deductible.Dividends
1616
Excess interest expense is deductible at up to 30% of the gross operating margin
(interest deduction capacity) as reported in the financial statements.
Gross operating margin is defined as the difference between operating revenues and
expenses excluding depreciation of tangible and intangible assets and charges for
leased assets as stated in the profit and loss account for the year.
Net interest expense in excess of the yearly limitation is carried forward indefinitely.
• Generally, interest expense is fully taxdeductible up to the amount of interestincome.
Interests
Corporate income tax
Positive Adjustments
1717
Net interest expense not deducted in previous years can be deducted in any future
fiscal year as long as total interest in that year does not exceed 30% of gross
operating margin.
If net interest expense is lower than the annual limit (i.e. 30% of gross operating
margin), this difference can be carried forward to increase the company’s interest
deduction capacity in future years.
Corporate income tax
Positive Adjustments
1818
Dividends derived by resident companies from other resident companies or from
companies resident in countries other than “tax havens” are not included in the
corporate taxable base for 95% of their amount, pursuant to article 89 of the Tuir.
Conversely, no exemption applies to dividends paid by entities that are resident in
tax haven jurisdictions (unless those dividends derive from profits that were already
taxed under the Italian CFC rules).
The 5% portion that is taxable is included in the taxable income on a cash basis.
Corporate income tax
Exemption - Dividends
1919
Under the regime called participation exemption regime (PEx), capital gains realized
by Italian companies on sales of shareholdings are 95% exempt from IRES, pursuant
to article 87 of the Tuir.
PEx applies if all of the following conditions are met:
a) the shareholding was held uninterruptedly for at least 12 months prior to the
sale;
b) the investment was classified under financial fixed assets in the financial
statements relating to the first tax period of uninterrupted ownership;
c) the subsidiary is actually carrying on a commercial activity (e.g. investments in
companies mainly performing management of their own real estate are not
entitled to PEx benefits);
d) the majority of the subsidiary's income is not generated in a tax haven country or
one with a privileged tax regime.
Corporate income tax
Exemption – Capital Gains
2020
In order to qualify for the exemption, the subsidiary must carry on a real business
activity (active business test) in the 3 fiscal years preceding the year of the disposal
of the shares.
The active business test does not apply in the case of participated companies listed
on a stock exchange.
Companies the value of whose assets is mainly represented by real estate assets not
used in the business activity are deemed not to perform a business activity.
Corporate income tax
Exemption – Capital Gains
2121
Fixed assets other than financial assets may be depreciated (amortized in the case of
intangible assets) using the straight-line method. Depreciation (amortization) may be
taken in every fiscal year, regardless of whether the taxpayer incurred losses or
made profits.
Tax law contains precise criteria for both depreciation and amortization, which
differ substantially from those provided for civil law and accounting purposes.
Corporate income tax
Depreciation and Ammortization
Depreciation for accounting
Business assets must be depreciatedaccording to their residual utility
Depreciation for taxes
Business assets may be depreciatedonly according the straight line
method and the annual allowance isdetermined by applying the rates
set by the Ministry
2222
The legal owner is the person entitled to depreciate the assets, but there are some
exceptions (i.e. business’ lease or usufruct).
Generally, depreciation for tax purposes refers to a 12-month period. If the assets
are used only for part of the period or if the fiscal year is longer than 12 months,
depreciation must be adjusted accordingly.
Corporate income tax
Depreciation and Ammortization
2323
Tangible assets may be depreciated only according to the straight-line method; the
annual allowance for tax purposes is determined by applying the rates set by the
Ministry of Economy and Finance (i.e. Ministerial Decree December 31, 1998) to the
asset’s (unadjusted) tax basis (i.e. the original cost).
Corporate income tax
Depreciation
• Land is not depreciable since it is not considered subject to wear and tear.For other real estate assets, i.e. buildings, depreciation follows thegeneral rules provided for tangible property.
• The depreciable base is the (unadjusted) tax basis, i.e. cost increased bythe expenses ancillary to the purchase or construction of the asset.
• The rates range from 3% to 5%, according to the sector of activity.
Immovable property
• For plant, machinery and equipment depreciation follows the general rules provided for tangible properties.
• The depreciable base is the (unadjusted) tax basis, i.e. cost increased by the expenses ancillary to the purchase or construction of the asset.
• The rates range from 10% to 40%, according to the goods and the sector of activity.
Plant, machinery and
equipment
2424
Amortization of intangible assets is subject to specific rules, depending on the nature
of the asset.
Corporate income tax
Ammortization
• Trademarks may be amortized up to one eighteenthof their cost for each fiscal year.
• Patents and other intellectual property may beamortized up to one half of their cost (article 103 ofthe Tuir).
Trademarks and Patents
• Goodwill may be amortized only if it is recorded in thebalance sheet. Under company law, goodwill may berecorded in the balance sheet, with the approval ofthe statutory auditors (if any), only if it was acquiredfor consideration.
• Goodwill may be amortized only up to one eighteenthof its cost in each fiscal year.
Goodwill
2525
If a depreciable asset is sold, a capital gain (or loss) equal to the difference between
the consideration (sale price) received and the asset’s adjusted tax basis (i.e. cost
less depreciation) must be included in taxable income.
If the asset is disposed of without being sold (e.g. the asset is destroyed), the
remaining adjusted tax basis is deductible.
However, if an indemnity is received, the positive difference between the amount of
the indemnity and the remaining adjusted tax basis is a capital gain and must be
included in taxable income.
Corporate income tax
Disposal of an asset
2626
Corporate income tax
Rates
• The corporate income tax (IRES) rate is 27,5%,pursuant to article 77 of the Tuir.
• IRES rate will be reduced from 27,5% to 24%,effective for the fiscal year 2017.
Standard Rate
• A 6,5% applies to companies operating in the oil, gasor energy business.
• A special 4% surtax applies to Italian residentcorporations that are engaged in the explorationand treatment of hydrocarbons.
Surtaxes
2727
Corporate taxpayers may use their tax losses to offset the taxable income of
subsequent years only up to 80 per cent of the taxable income of any given year
(article 84 Tuir).
In other words, taxpayers are prevented from completely offsetting the taxable
income of a given year even if they have carried forward losses equal to or greater
than their taxable income.
The limitation does not apply to tax losses incurred in the first 3 years of business
activity, therefore those losses may be set off in full.
Corporate income tax
Losses carry forward
2828
•payment of the
residual balance of
previous year taxes
•first installment of the
IRES and is equal to 40%
of the tax due for the
previous fiscal year
June 16
• Annual tax return(Modello UNICO)
September 30 • second installment of
the IRES and is equalto 60% of the tax duefor the previous fiscalyear
November 30
Corporate income tax
Annual deadlines
2929
PRODUCTIVE ACTIVITIES
TAXATION
3030
IRAP is levied on companies, partnerships and individuals that carry on an
autonomously organized activity aimed at either the manufacturing/trading of
goods or the supplying of services.
Legislative Decree December 15, 1997, n.446 introduced and regulates the regional
tax on productive activities (IRAP).
An IRAP taxable event is the regular conduct of an autonomously organized activity
aimed at either the manufacturing/trading of goods or the supplying of services.
Regional business tax
3131
IRAP is levied on the net value of production derived in each Italian Region, and the
way the taxable base is computed changes depending on the type of taxpayer and
on the type of activity carried out, so there are specific rules for companies, banks
and financial institutions, insurance companies, partnerships and sole
proprietorships.
If a taxpayer carries on its activity in more than one Italian Region, the taxpayer
must apportion the net value of production among the regions involved. An Italian
Region is allocated part of the taxpayer’s IRAP base only if the taxpayer conducts its
activity in that region for at least 3 months in a fiscal year through a factory, a
building site, an office or another fixed base therein.
Regional business tax
Taxable income
3232
For commercial and manufacturing companies:
Regional business tax
Taxable incomeIn
clu
de
din
th
e t
axa
ble
ba
se
Gross receipts from sales and services;
Increases in inventory;
Increases in the value of works in progress;
Increases in the value of internally developed business assets;
Certain capital gains; and
Other, miscellaneous proceeds.
No
tin
clu
de
d Certain capital gains
Extraordinary items of income
Interest received
De
du
ctib
le Cost of raw materials, goods and merchandise
Service fees
Rental payments
Depreciation of tangible assets
Amortization of intangible assets
Decreases in inventory
Other business costs
No
td
ed
uct
ible Certain capital losses
Amounts set aside to reserves and provisions
Interest payments
Municipal taxes
Extraordinary costs
3333
The following labor costs may be deducted:
� labor costs relating to fixed-term employees (effective as of the fiscal year
following the fiscal year current on 31 December 2014);
� social security contributions (deduction not applicable to certain utility
companies and companies operating in certain regulated sectors);
� costs of personnel engaged in research and development activities; premiums
paid for employees’ injury insurances;
� EUR 15,000 per year per employee with a permanent contract employed in
Abruzzi, Apulia, Basilicata, Calabria, Campania, Molise, Sardinia or Sicily,
increased to EUR 21,000 if the employee is a woman or under the age of 35; and
� EUR 15,000 for each new employee hired with a permanent contract if certain
conditions are met.
Regional business tax
Deductions
3434
However, in relation to each employee, the above deductions cannot exceed the
actual labor costs (including social security contributions) borne by the employer
during the fiscal year.
Starting from the fiscal year following the fiscal year current on 31 December 2015,
IRAP persons that do not have employees are entitled to a tax credit equal to 10% of
the gross (i.e. pre-credit) IRAP due.
The tax credit may only be used to offset taxes and social security contributions due.
Regional business tax
Deductions
3535
Regional business tax
Rates
• The regional business tax (IRAP) rate is 3,9%, pursuant to article 15 Legislative Decree December 15, 1997, n.446 .
• Regional authorities may decrease or increase these rates by up to 0,92%.
Standard Rate
3636
•payment of the
residual balance of
previous year taxes
•first installment of the
IRAP and is equal to 40%
of the tax due for the
previous fiscal year
June 16
• Annual tax return(Modello IRAP)
September 30 • second installment of
the IRAP and is equalto 60% of the tax duefor the previous fiscalyear
November 30
Regional business tax
Annual deadlines
3737
VALUE ADDED TAX
3838
VAT
Definition
The value added tax (“Imposta sul valore aggiunto”, IVA) is a general tax on
consumption in Italy.
The bulk of the VAT legislation is contained in Presidential Decree October 26, 1972
no.633 (hereinafter, “VAT Law”).
The Sixth Council Directive 77/388/EEC of 17 May 1977 on a uniform basis of
assessment was implemented in Italy by legislation that became effective on 1
January 1979. On 16 December 1991, the Council of Ministers adopted the Council
Directive 91/680/EEC of 16 December 1991, which supplemented the common
system of VAT and amended the Sixth Directive regarding the abolition of fiscal
frontiers within the European Union.
The 1993 changes affect the movement of goods between EU Member States only.
The movement of goods between EU Member States and non-EU Member States are
still treated as imports and exports.
3939
A transaction is subject to VAT in Italy only if it is deemed to take place in Italy.
VAT
Mechanism
VAT is levied on the supply of goods and services made in the undertakings of an
enterprise or an artistic or professional activity.
A VAT invoice must be issued for all taxable transactions (for which an invoice is
required) at the time the transaction takes place.
4040
Under article 4 of the VAT Law, undertaking an enterprise means habitually (but not
necessarily exclusively) carrying on any of the activities listed in either article 2135
of the Civil Code (i.e. agricultural activities) or in article 2195 of the Civil Code (i.e.
commercial activities), regardless of whether these activities are organized in the
form of an enterprise as defined for business law purposes.
Undertaking an enterprise also includes carrying on activities for the purpose of
providing services other than those indicated in article 2195 of the Civil Code, but
only if the activities are organized in the form of an enterprise as defined for
business law purposes.
VAT
Scope
4141
Corporations, limited liability companies, partnerships limited by shares,
commercial partnerships (business partnerships), other commercial entities and
foreign companies are always deemed as persons that undertake an enterprise.
However, the following activities do not constitute an enterprise for VAT purposes
even if carried out by the previously mentioned entities:
� the holding by a company of residential real estate and certain movable assets
(e.g. ships, aircraft and motor vehicles for private use, sport or recreational
centers) if the shareholders can use the property and the assets for no
consideration or for a consideration below market value; and
� the holding of participations or securities as fixed assets that are not otherwise
connected with the company’s business where the sole purpose is the receipt of
dividends and interest, without the exercise of any financial or investment
activity.
VAT
Scope
4242
VAT
Mechanism
The following transactions are taxable:
� The supply of goods and services in Italy for consideration by an entrepreneur in
the course of a business;
� The intra-community acquisition of goods in Italy by an entrepreneur in the
course of a business;
� The intra-community acquisition in Italy of new means of transport by any
person;
� The import of goods from outside the European Union into Italy.
Supplies of goods: all transfers for consideration of the ownership or other
right in rem in tangible assets
Supplies of services: services performed under certain
enumerated contracts or under an obligation to do, not to do,
or permit something
4343
VAT
Mechanism
Only goods and services supplied within the territory of the State of Italy are
subject to VAT.
Pla
ceo
fta
xati
on
>>
go
od
s
The place of supply forgoods is considered to bewhere the goods arelocated at the time ofsupply.
Pla
ceo
fta
xati
on
>>
serv
ice
s
Services are deemed to besupplied within Italy if:
- The services are providedto taxable personsestablished within Italy;
- The services are providedto final consumers bytaxable persons establishedwithin Italy.
4444
VAT is applied on an accrual basis.
VAT
Mechanism
• The supplier owes thetax to the tax authoritieswhen he issues aninvoice and not at thetime he receivespayment.
• The supplier is entitledto a credit for the VATshown on his ownsuppliers' invoices, or forthe VAT paid on imports,regarding any goods andservices he has acquiredfor his business needs.
• The buyer is entitled tothe VAT credit at thetime he receives theinvoice from his supplierand not at the time hemakes payment.
This VAT mechanism means that the actual tax
burden is only borne by the end user, who has
no right to recover the VAT he has paid.
4545
The taxable amount of goods and services supplied is the gross consideration
received, excluding the VAT itself (article 13 of the VAT Law).
The taxable amount may be increased by the value of costs directly connected with
the supply, e.g. insurance and transportation costs, commissions.
In the case of a taxable self-supply of goods by an entrepreneur, the taxable amount
is their fair market value.
In the case of imported goods, the taxable amount is the c.i.f. value (i.e. value is the
price paid for the goods plus the cost of transportation, loading, unloading,
handling, insurance, and associated costs) of the goods plus customs duties,
excluding VAT.
VAT
Taxable base
4646
VAT
Rates
• 22%
• 24% effective for the year 2018.Standard Rate
• 10%
• 13% effective for the year 2017.Reduced Rate
• 4%Special Reduced Rate
• 0%
• if there is sufficient evidence that the goods were transported outside Italy, and the supplier and the purchaser are registered to perform intra-UE transactions
Exports and intra-Community supplies
4747
Any person who starts a business or professional activity in Italy, or establishes a
fixed establishment in Italy, must register with the competent office of the Italian
tax authorities within 30 days (article 35 of the VAT Law).
The tax authorities then issue a VAT registration number which should be indicated
in all of the taxable person’s documents that relate to VAT.
With effect from 1 January 2015, entrepreneurs in Italy supplying electronic
services in various EU Member States have the option to apply for a mini one-stop
shop (MOSS) system to avoid the need for registration in each of the Member
States separately.
Under the MOSS system, entrepreneurs that supply telecommunications,
broadcasting and e-services (TBE services) to consumers in Member States in which
they do not have an establishment may account for the VAT due on those supplies
via a web portal in the Member State of establishment.
VAT
Registration
4848
Taxable persons must issue invoices to their customers, either in a paper form or by
electronic means, at the time of supply.
Invoices must be issued by the 15th day of the month following the month in which
the goods are supplied or the services performed in the case of:
� supplies of goods delivered together with documents of transport; and
� intra-Community supplies.
VAT
Invoicing
4949
The invoice must be issued in two original copies and contain the following
information:
� the date of the supply;
� the number of the invoice;
� the name and address of the supplier and of the customer;
� the VAT number of the supplier and of the customer or of his tax representative
in Italy;
� a description of the goods or services supplied;
� the quantity of the goods supplied;
� the consideration and any information necessary to determine the VAT tax base;
� the applicable VAT rate (or the applicable section of the law for exempt or zero-
rated supplies) and the VAT base;
� the amount of VAT due; and
� an indication of the applicable law provisions.
VAT
Invoicing
5050
VAT
Invoice example
5151
VAT
Invoice example
1. the date of
the supply;
2. the number of
the invoice
3. the name and
address of the
customer;
4. the name and
address of the
supplier
5. description of the
goods or services
supplied
6. quantity of the
goods supplied
7. consideration and
any information
necessary to
determine the VAT
tax base
8. the applicable VAT
rate
9. the amount of VAT
due
10. an indication of
the applicable law
provisions
5252
• Annual VAT return
February 28
• Annual communication al transactions (Spesometro)
April 10• Annual communication
of the transactions performed with entities having their residence or operating in a black list county or territory
April 20
VAT
Annual returns
5353
• Monthly VAT liquidation
Each month, 16
• Monthly communication of the transactions performed with other EU entities (ModelloIntrastat) *
Each month, 25
VAT
Periodic returns and payments
* on a quarterly basis by entities who accrued, in the
previous 4 quarters and for each category of
transactions, an overall amount not higher than
50,000 euros in each quarter.
5454
RESEARCH AND DEVELOPMENT
TAX CREDIT
5555
R&D tax credit
The tax credit is available to all enterprises,
regardless of their legal form, the industry in which
they operate and the accounting system adopted.
Article 3 of Law Decree December 23, 2013, n.145
provides for a tax credit for R&D expenses available
from the fiscal year that was ongoing on 31
December 2015 to the fiscal year that is ongoing on
31 December 2019 (2015 to 2019 for enterprises
that follow the calendar year).
The Ministry of Economy and Finance set forth the
implementing rules in the Ministerial Decree of May
27, 2015.
The tax authorities issued Circular Letter No. 5/E of
16 March 2016 providing official guidance.
5656
R&D tax credit
The following activities are eligible for the R&D tax credit:
� basic research, i.e. experimental or theoretical work undertaken primarily to
acquire new knowledge of the underlying foundation of phenomena and
observable facts, without any particular application or use in view;
� applied research, i.e. inquiry aimed at developing or improving products,
processes and services;
� experimental development, i.e. systematic work, drawing on existing knowledge,
which is directed to producing plans, projects or formulas for new materials,
products, devices or services;
� manufacturing and testing of products, processes and services, provided that
they are not used for commercial purposes or industrial application.
R&D Activities
5757
R&D tax credit
The ordinary or periodic changes made to products, production lines, manufacturing
processes, existing services and other operations in progress, even if such changes
represent improvements are not deemed to be research and development activities.
R&D Activities
5858
R&D tax credit
R&D Activities
Qualifying R&D expenses, whether capitalized or not, must be directly connected
with any of the eligible R&D activities listed above. In particular, qualifying R&D
expenses include:
•wages and salaries (including social security contributions) for highly skilled personnel engaged in eligible R&D activities, as well as remuneration paid to third party professionals who perform their R&D services at the taxpayer’s premises;
•depreciation of laboratory equipment (items of equipment that cost less than EUR 2,000, net of VAT, are excluded), as well as financial leasing fees (excluding the interest component);
•fees for research outsourced to universities, research institutes and unrelated enterprises, including start-up companies, provided that such enterprises are eitherresident or established in an EEA Member State included in the white list;
•fees paid to purchase or to in-license patents and know-how.
5959
R&D tax credit
Amounts
The tax credit is equal to:
� 25% of the qualifying R&D expenses under numbers (2) and (4) over the yearly
average of such qualifying R&D expenditures that the enterprise has incurred in
the 3 fiscal years preceding the fiscal year as at 31 December 2015.
If the enterprise has been operating for less than 3 years, the average is
computed taking into account the shorter period of operation. The average is 0
for enterprises set up after 31 December 2015;
� 50% of the qualifying R&D expenses under numbers (1) and (3) over the yearly
average of such qualifying R&D expenditures that the enterprise has incurred in
the 3 fiscal years preceding the fiscal year as at 31 December 2015.
If the enterprise has been operating for less than 3 years, the average is
computed taking into account the shorter period of operation. The average is 0
for enterprises established after 31 December 2015.
6060
R&D tax credit
Amounts
The tax credit is available only provided that in a given fiscal year the aggregate
amount of the eligible R&D expenses is higher than the yearly average of the
qualifying R&D expenditures that the enterprise has incurred in the 3 fiscal years
preceding the fiscal year as at 31 December 2015.
Moreover, the tax credit is available only if the enterprise incurs at least 30,000
euros of qualifying R&D expenses in a fiscal year.
The tax credit can be directly reported and claimed in the corporate income tax
return relating to the fiscal year in which the R&D expenses have been incurred,
without the need of submitting any specific application to the tax authorities.
The amount of the tax credit is not included in taxable income, nor does it increase
the IRAP taxable base.
The tax credit can only be offset against other taxes and social security contributions.
6161
PATENT BOX
6262
Intangibles that qualify under the Italian patent box regime are:
� patents;
� processes;
� formulas;
� designs;
� models that can be legally protected;
� copyrighted software;
� any other kind of know-how that can be legally protected (qualifying intellectual
property, IP).
Article 1 (37-45) of the Law December
23, 2014, n.190, as amended by article
5 of the Law Decree January 23, 2015,
n.3, enacted a new optional patent box
regime in Italy.
Patent Box
Regime
6363
Foster the placement in Italy of intangibleassets currently held abroad by Italian orforeign companies;
Encourage the maintenance of intangibleassets in Italy, avoiding their relocationabroad; and
Promote the investments in research anddevelopment activities.
Patent Box
Purposes
6464
The election for the patent box regime requires that the taxpayer either:
• carries out the R&D activities aimed at developing, maintaining or improving the
qualifying IP itself; or
• outsources these activities to universities, research institutions (or equivalent
entities) or unrelated companies.
The election is valid for 5 fiscal years and cannot be revoked. The election can be
renewed.
The election can be made on specific qualifying IPs only. In other words, it is not
necessary to apply for the patent box regime with respect to all the eligible
intangible assets held by the taxpayer.
Patent Box
Discipline
6565
Patent Box
Exemptions
Under the patent box regime, income arising from:
� licensing the qualifying IP to third parties and related parties (i.e. royalties), net of
the direct and indirect costs related to the qualifying IP; and
� directly using the qualifying IP (i.e. the value of the qualifying IP embedded into
the sale price of goods and services),
were 30% exempt from IRES in 2015.
The exemption is raised to 40% in 2016, and will be fully phased in starting from
2017 reaching the standard rate of 50%.
The same exemption will be available for IRAP purposes.
6666
IRAP TAX INCENTIVES TO
STARTUPS
6767
The IRAP refund provided by Lazio Region is reserved to startups which:
a) have recorded in the appropriate special section of the register of Economic
Development Ministry;
b) having at least a place of business in Lazio;
c) have carried out IRAP payments for the first two fiscal years without having
already obtained by other administrations the return of the amount paid.
The refund can be total or partial and concerns the IRAP paid for the first two fiscal
years.
IRAP Incentives
Lazio Region IRAP tax refund
6868
Campania Region approved a contribution for the development of innovative
processes for a maximum value of 100% of the IRAP due for the fiscal years 2016,
2017, 2018.
The contribution is reserved to startups having the registered office or at least one
operating office in Campania.
IRAP Incentives
Campania Region IRAP contributions
6969
PUBLIC INCENTIVES TO
STARTUPS
7070
Public Incentives to Start-Up
Region by Region 1/3
Region Scope
Lombardia Project «Intraprendo»: 30 millions Euros for new enterpreneurial
businesses
Lazio 6.2 millions Euros available from public venture capital to
support SMEs’ and Start-up’s Equity
Campania 1 billion Euros for the next 7 years to invest in research and
innovation projects
Sicilia Project «SelfiEmployment»: 58 millions Euros for entepreneurs
under-35
Veneto A callalways opened to support start-up and SMEs (admissible
expenses: from 20.000 to 100.000 Euros)
Emilia Romagna 6 millions Euros to support the launch and the stabilization of
start-up
Piemonte 8,5 millions Euros allocated for the years 2014-2020 to start-up
7171
Public Incentives to Start-Up
Region by Region 2/3
Region Incentive
Toscana Facilitated loans and vouchers (4 millions Euros initially available)
for services for innovation’s advice and support
Calabria 4 millions Euros for SMEs operating in the Region
Sardegna 10 millions Euros of equity to directly invest in start-up
Liguria 3 millions Euros of EU fund for the launch and development of
start-up
Marche Allocated 12 millions Euros for start-up (8 already available)
Abruzzo 13 millions Euros allocated for hiring researchers and to support
applied research activities
Friuli Venezia-
Giulia
In the next months 45 millions Euros available to be allocated for
innovation and research activities
7272
Public Incentives to Start-Up
Region by Region 3/3
Region Incentive
Puglia «Nidi» project: 54 millions Euros for new enterprises
Valle D’Aosta «Fabbrica Intelligente» project: 1 million Euros reserved to
industrial research and experimental studies of start-up
Basilicata 8 millions Euros for start-up and spin-off and 15 millions Euros
for SMEs’ investments
Molise Loans for 25.000 Euros each reserved to start-up
Trentino Alto-
Adige
80.000 Euros allocated for new enterprises
Umbria 2 millions Euros reserved to start-up and innovative SMEs for the
year 2016
Flavio Notari, Prof. Dott.
00196 Rome
Via Flaminia, 135
Tel. +39 06 8091 3201
www.legalitax.it
ROME - PADUA - MILAN - VERONA