THE MAIN TAX CHANGES LAID DOWN BY LAW NO. 160 OF 27.12.2019 (SO-CALLED “BUDGET LAW 2020”)
The budget law 2020 has restored the ACE (Aid to Economic Growth), starting from the tax period after the one in progress as at 31.12.2018 (that is, from 2019, for “calendar year” subjects). The facilitation thus applies seamlessly with respect to 2018. However, the capital remuneration coefficient has been reduced further, envisaged at full operation (from 2019) in the measure of 1.3%: the tax free income is, therefore, equal to 13,000.00 euro for each million Euro of significant increase of capital.
Business asset revaluation
The Budget Law 2020 has reopened the provisions regarding the revaluation of company assets. The revaluation:
- concerns the assets resulting from the financial statements for the year in progress as at 31.12.2018 These assets are the corporate assets with the exclusion of the real estate whose production and exchange the business activity is directed towards, as well as the shareholdings in subsidiaries and associated companies pursuant to article 2359 of the civil code constituting tangible fixed assets;
- must be made in the subsequent financial statements (financial statement as at 31.12.2019, for “calendar year” subjects).
In more detail the corporate assets are:
- the depreciable and non-depreciable tangible fixed assets,
- the intangible fixed assets, made up of goods consisting of legally enforceable rights and
- the above-mentioned shareholdings, made up of financial fixed assets.
Compared to the previous special measures of revaluation:
- the amount of the substitute tax payable has been reduced (12% for depreciable assets; 10% for non-depreciable assets. The previous rates were respectively 16% and 12%);
- the right to pay the taxes in instalments has been introduced (in 3 or 6 instalments according to the relevant amount; if the overall amount owed does not exceed 3 million euro, in three instalments of the same amount; if it exceeds it, in six instalments of the same amount).
Increase of the percentage of deductibility of Municipal Property Tax (IMU)
Changes have been made to the percentage of Corporate/Personal Income Tax (IRES/IRPEF) deductibility of municipal property tax (IMU) regarding instrumental real estate. The customary deductibility criteria remain the same.
Deductibility for the “calendar” tax year 2019
The 50% deductibility from business and employed work income of the IMU regarding instrumental real estate has been confirmed for the tax year following the one in progress as at 31.12.2018 (meaning, for the “calendar” tax year 2019).
Deductibility for tax years after the “calendar” year 2019
The IMU deductibility from the business and employed work income, always in relation to the instrumental real estate increases in the measure of:
- 60%, for tax periods after the one in progress as at 31.12.2019 and as at 31.12.2020 (that means “calendar year” periods 2020 and 2021);
- 100%, at full operation, from the tax period after the one in progress as at 31.12.2021 (that means from the “calendar year” period 2022).
Fringe benefits – car granted to employees for mixed use
For vehicles granted to employees for mixed use with contracts stipulated from 1.7.2020, the percentage of determination of the fringe benefit varies according to the level of the carbon dioxide emissions. In particular:
- for vehicles with carbon dioxide emission values not exceeding 60 g/km, 25% of the amount corresponding to an agreed mileage of 15,000 km is assumed, calculated on the basis of the cost per kilometre of the year taken from the ACI (Italian Automobile Club) tables;
- for vehicles with carbon dioxide emission values exceeding 60 g/km, but not 160 g/km, the percentage amounts to 30%;
- for vehicles with carbon dioxide emissions exceeding 160 g/km, but not 190 g/km, the indicated percentage is 40% for 2020 and 50% starting from 2021;
- for vehicles with carbon dioxide emissions exceeding 190 g/km, the indicated percentage is 50% for 2020 and 60% starting from 2021.
Tax credit for investments in instrumental assets
For investments in new instrumental assets made in 2020, replacing the extension of the so-called “super-amortisation” and “hyper-amortisation”, a new tax credit is envisaged.
Extent of the preferential rate
The “general” tax credit, regarding investments in new, non “4.0” tangible instrumental assets, is acknowledged (to companies and practitioners of arts and professions):
- in the measure of 6% of the cost;
- within the maximum admissible cost of 2 million euro.
For investments in “4.0” assets included in Annex A to Law 232/2016, the tax credit is acknowledged (only to enterprises) in the measure of:
- 40%, for investments up to 2.5 million euros;
- 20%, for investments between 2.5 and 10 million euros;
For investments regarding intangible assets included in Annex B to Law 232/2016, the tax credit is acknowledged:
- in the measure of 15% of the cost;
- within the maximum admissible cost of 700,000.00 euro.
Manner of using the facilitation
The tax credit:
- can be used for offsetting taxes and contributions, using the F24 form;
- is applicable to tangible assets (both “ordinary” ones as well as “4.0” ones) in five annual instalments of an equal amount (1/5th per year) and only for investments in intangible assets in three annual instalments (1/3rd per year);
- in the event of investments in “ordinary” tangible assets it can be used starting from the year after the one the assets came into function, whereas for investments in “Industria 4.0” assets starting from the year after the the one of interconnection.
The purchase invoice of the goods must report the legal reference of the facilitation.
Tax credit for research, development and innovations
For 2020, a new tax credit has been introduced for investments in research and development, in ecological transition, in technological innovation 4.0 and in other innovative activities. Actually they are two distinct tax credits, one referring to investments in research and development activities (that replaces the previous tax credit for investments in research and development activities, as laid down in art. 3 of Legislative Decree 145/2013) the other for innovative activities, which, are in turn broken down into the following by type of expenditure admitted and/or measure of tax credit receivable:
- technological innovation activities from which the achievement of technological transition or digital innovation 4.0 is not a consequence;
- technological innovation activities from which the achievement of technological transition or digital innovation 4.0 is a consequence;
- other innovative activities of design or aesthetic conception.
Extent of the preferential rate
For the research and development activity subject to the facilitation, the tax credit is payable:
- in the measure of 12% of the relevant basis of calculation;
- within the maximum admissible cost of 3 million euro.
For the technological innovation activities, the tax credit is acknowledged:
- in the measure of 6% of the relevant basis of calculation of 10% in the event of technological transition or digital innovation 4.0 objective;
- within the maximum limit of 1.5 million euro.
For the activities of design and aesthetic conception, the tax credit is acknowledged:
- in the measure of 6% of the relevant basis of calculation;
- within the maximum limit of 1.5 million euro.
In all other different cases, the calculation base is no longer related to the average of the same investments made in the three previous tax periods.
Manner of using the facilitation
The tax credit can be used:
- exclusively for offsetting using the F24 form;
- in three annual instalments of an equal amount;
- starting from the tax year after the one in which it is matured; subject to fulfilment of the envisaged certification obligations.
Tax Credit For 4.0 training
The tax Credit For 4.0 training has been extended to 2020 with some modifications regarding the measure of the facilitation
Extent of the preferential rate
For small enterprises (employees < 50; turnover/total sales from financial statements ≤ 10 million di euros) the tax credit is applicable:
- in the measure of 50% of the eligible costs;
- in the maximum annual limit of 300,000.00 euros.
For medium-sized enterprises (employees < 250; turnover ≤ 50 million di euros and/or Financial statement total ≤ 43 million euros:), the tax credit is applicable:
- in the measure of 40% of the admissible expenses;
- in the maximum annual limit of 250,000.00 euros (no longer 300,000.00 euros).
For large enterprises, the tax facilitation applies:
- in the measure of 30% of the admissible expenses;
- in the maximum annual limit of 250,000.00 euros (no longer 200,000.00 euros).
Without prejudice to the annual maximum limits, the measure of the tax credit for 2020 is increased, for all the enterprises, to 60% in the event of the recipients of the admissible training activities coming within the categories of disadvantaged or extremely disadvantaged employees.
Elimination of the obligation of collective contracts
The obligation of regulating the training activities in detail in the company or territorial collective contracts deposited with the competent territorial labour inspectorate has been eliminated.
Tax credit for trade fairs
The tax credit for costs incurred by the SMEs for participating in international trade fairs has been extended to 2020.
Sterilisation of the VAT increases
For the year 2020, the ordinary VAT rate is confirmed in the measure of 22%. Without prejudice to adopting legal provisions that ensure the same positive effects on the public finance balances, this VAT rate is established at:
- 25% starting from 1.1.2021;
- 26.5% starting from 1.1.2022;
For the year 2020 the reduced VAT rate of 10% is also confirmed. Without prejudice to adopting legal provisions that ensure the same positive effects on the public finance balances, this VAT rate is established at 12% starting from 1.1.2020.
Extension of the redetermination of the fiscal cost of land and of unlisted equities
The budget law 2020 extends the redetermination of the fiscal cost of the unlisted equities and of the land regulated by arts. 5 and 7 of Law 448/2001. Therefore, also for 2020 natural persons, ordinary partnerships, non-commercial bodies and non resident subjects without a stabile organisation in Italy will be allowed to revaluate the cost or value of purchasing unlisted shares and land possessed as at 1.1.2020, outside the business activities by releasing wholly or partially the gains made under art. 67 (1) letter a) – c-bis of the Consolidating Law on Income Tax (TUIR), if the shares or land are transferred for consideration. In order to opt for this system, before 30.6.2020 the following must be performed:
- an authorised professional (for example, a qualified accountant, a surveyor, engineer and so on) must draw up and swear the appraisal of the shareholding or of the land;
- the tax payer concerned must pay the substitute tax in its entirety or (in the event of payment in instalments) the first of the three annual instalments of an equal amount. The extension indicated envisages the application of the substitute tax with single rate of 11% on the value of the appraisal of the land or of the unlisted share.
Tax on the consumption of disposable products (so-called “plastic tax”)
A tax has been introduced on the consumption of disposal plastic products (so-called MACSI) which have or are intended to have a containing, protecting, handling or goods or food product delivery function (so-called “plastic tax”). The application of the tax also excludes the MACSI that are compostable in compliance with the UNI EN 13432:2002 law.
The tax is payable:
- for MACSI made in the domestic territory, the manufacturer;
- for the MACSI coming from other EU member states, the subject purchasing the goods in exercising the economic activity or the assignor if the MACSI are purchased by a private consumer;
- for the MACSI coming from non EU countries, the importer.
Measure of the tax
The tax is established in the measure of 0.45 euro per kilo of plastic material contained in the MACSI.
For technological alignment aimed at the production of compostable products in accordance with the EN 13432:2002 standard, tax credit in the measure of 10% of the costs incurred from 1.1.2020 to 31.12.2020 is acknowledged up to a maximum amount of 20,000.00 euro for each beneficiary.
The manner for implementing the new tax will be established by a provision of the Customs and Excise Agency.
Start date of the new tax
The new tax will apply starting from the first day of the second month after the publication of the implementation measure on the Official Gazette of the Italian Republic.
Tax on digital services (so-called “web tax”)
Starting from 1.2.2020 the application of the new “tax on digital services” (so-called “web tax”) is envisaged
The tax is applicable exclusively to revenue deriving from supplying the following services:
- conveyance of advertising on a digital interface to the users of the same interface;
- providing a multilateral digital interface that allows the users to be in contact and to interact amongst themselves, also to facilitate the direct supply of goods or services;
- transmitting data collected from users and generated by the use of the digital interface.
The tax applies to the revenue coming from these services, when, at the same time:
- the service provider is a subject performing business activity that, individually or at group level jointly generates:
- an amount of no less than 750 million euro of overall earnings, however, it is achieved and deriving from any activity;
- an amount of revenue of no lower than 5.5 million euros deriving from digital services relevant for the purposes of the tax and generated in Italy;
- the user of the service is a subject that is considered located in Italy in the calendar year in which the service is taxable.
Measure and application of the tax
The tax is due in the measure of 3% and is applied to the sum of the taxable revenue generated by the liable subject in the course of the calendar year.
Payment of the tax and declaration obligations
The payment of the tax by the liable subjects must be made by 16th February of the calendar year after the one with reference to which the tax was calculated. The liable subjects are obliged to present the annual declaration of the amount of taxable services provided, by 31st March of the calendar year after the reference year.
Further implementing and applicative requirements may be detailed by the implementing decree and by measures of the Revenue Office that will make the new tax concretely operative.
Letter a) of art. 1 (226-228) orders an integration to the expenditure authorisation for the period 2020 – 2025 for the purposes of extending the so-called “Sabatini – ter” facilitation, a supporting measure that consists of granting micro, small and medium-sized enterprise:
- a facilitated load for investments in new machinery, plants and equipment, including the so-called investments in instrumental assets “Industria 4.0” (big data, cloud computing, ultra broadband, cybersecurity, advanced robotics and mechatronics, augmented reality, 4D manufacturing, Radio frequency identification (RFID), tracking and weighing waste);
- a correlated state contribution grant for plants related to the interest calculated on these loans.
A share, equal to 30% of the allocated resources is reserved to the granting of state contributions “increased” by 30% for Industria 4.0 investments.
This increase is raised to 100% for the micro and small enterprises that make “Industria 4.0” investments in the following regions:
within the overall limit of 60 million.
A share, equal to 25% of the earmarked resources, will be allocated to the micro, small and medium-sized enterprises against the purchase, even through leasing operations, of newly manufactured machines, plants and equipment for productive use, with low environmental impact, within programmes aimed at improving the eco-sustainability of the products and production processes. For these transactions, the state contributions are related to the interest calculated, by treaty, on the loan at an annual rate of 3.575%.
LDP TAX & LAW office remains at your disposal for any further or more thorough information regarding the matters described above.
Dott.ssa Marta Martino
LL.M. Dottore Commercialista – CPA