SupplHi Customers from Italy can benefit from a 20% tax relief for investments on 4.0 intangible assets as per the 2021 Italian Budget Law
THE 2021 ITALIAN BUDGET LAW
The Budget Law of 2021 reconfirms the main fronts of action of the Italian Government – healthcare, support for businesses and families, envisaging important reforms, and introducing an investment program of over 50 billion € over 15 years period. The aim of the program is that of relaunching economic growth, limit the economic and social impact caused by the global covid-19 pandemic, as well as initiate the transformation of the country using the principles of innovation, sustainability, cohesion, and fairness as driving forces.
It also strengthens and extends the national Industry “Transition 4.0” program for two more years, a great opportunity for companies operating in Italy. The program, announced in June 2020 and funded with 7 billion Euros, defines the technical criteria for investments in research and development and lists the activities included in the concept of digital innovation 4.0, while also designing the rules for requesting and using the tax relief. It also focuses on incentives, in the form of tax reliefs, for investments in goods and digital technologies innovate production and manufacturing processes.
TRANSITIONING ITALY TO THE 4.0 DIGITAL ECONOMY
The “Transition 4.0” program reflects the importance given by the Government to sustainable innovation and uses economic policies to stimulate growth and investments in Italy. The 2021 Budget Law brings significant changes to the “Transition 4.0” program and widens the spectrum of assets included in the tax relief provisions. The 4.0 industrial plan incentives for purchasing high-tech capital services and goods, whether these are tangible or intangible, have been raised to a maximum of 20% (compared to the previous 15%) and are now applicable to purchases of intangible assets even when there are no related tangible assets in the same investment, a welcome update to the previously limiting provisions.
The purpose of this extension is to support and incentivize companies to invest in new tools that facilitate transitioning towards a more technological and green future. Annex B to the 2021 Italian Budget Law explains in detail what kind of tools fall within the “4.0 Intangible Assets”, including in it “…software, systems, platforms, and applications for accessing to a virtualized, shared, and configurable set of resources to support production processes, production and/or supply chain management (cloud computing)”.
SUPPLHI PLATFORM IS AN INTANGIBLE ASSET
SupplHi, the best-in-breed Vendor Management SaaS for industrial equipment and services, is the perfect example of a 4.0 intangible asset as described in Annex B, meaning that Italian buyer organizations using SupplHi can qualify for a 20% tax relief on expenditures up to 1 million €.
According to the Budget Law, the 20% tax relief is applied to companies that made investments in 4.0 intangible assets for up to 1 million € by December 31, 2022, but a further prolongment of the “Transition 4.0” program is already being discussed by the government and should see the final approval by the end of 2021. The tax relief can only be used in compensation of the investment and will be distributed using the F24 model over three annual installments of the same amount, starting from the year following the purchase order.
For companies to benefit from the tax relief, they must produce a technical evaluation of the acquired good performed by a specialized engineer or an industrial consultant to support the tax relief request. In case the unit cost of goods is lower than € 300,000.00, a declaration by the legal representative will suffice.
If you are an Italian Buyer organization looking for the most efficient and compliant way to – among other things – manage your Vendor Base, access Vendor profiles, monitor risk thresholds, evaluate performances, and assess sustainability levels of your entire supply chain, SupplHi is the right solution for you, and thanks to the financial incentives and the 20% tax relief, there is no better moment than now. We kindly suggest you verify with your accountant whether your company meets all the requirements.