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Italy: Corporate tax incentives include bonus depreciation, reduced rate, patent box changes

Italy: Corporate tax incentives

A decree of “urgent economic growth measures” (Decreto Crescita) was published in the official gazette on 30 April 2019 and is effective 1 May 2019. The decree introduces the following tax incentives:


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  • The reintroduction of an extra or bonus depreciation regime for certain tangible assets—a benefit equal to 30% of the costs of investments in new tangible assets when purchased between 1 April 2019 and 31 December 2019, with the deadline extended to 30 June 2020 if at least 20% of the cost is paid in advance by the end of 2019; and subject to a cap of €2.5 million on eligible investments.
  • A reduced rate of corporate income tax (IRES) on reinvested profits—instead of the standard corporate income tax rate of 24%, a reduced rate is phased in from 22.5% for fiscal year 2019 to 20.5% for fiscal year 2022, to the extent that profits are reinvested in the company and the net equity of the year exceeds that recorded in fiscal year 2018.
  • An increase in the deductibility of local real estate tax (IMU) for corporate income tax purposes—instead of the currently deductible 40% of IMU, for 2019, 50% will be deductible and the rate gradually increases to 70% by 2022.
  • Simplification of the patent box regime—taxpayers can access the patent box relief by calculating the benefit themselves, instead of having to obtain a tax ruling from the tax authorities.
  • Reintroduced business combinations bonus allowing the book value of certain items (goodwill, tangible assets, intangible assets) to receive step-up treatment in a merger, demerger, or business combination—the incentive is to be available for transactions concluded before 31 December 2022.

Read a May 2019 report [PDF 174 KB] prepared by the KPMG member firm in Italy

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