Industry 4.0: Italy’s masterplan for growth

Luca Insabato, HLB Italy, Partner at Triberti Colombo & Associati

The Italian government has recently introduced Industry 4.0, a scheme to encourage the growth and development of companies, especially through support for research and development, and increased innovation in production processes.

Such measures focus on making available investment and providing tax rebates for productivity-related salary increases (so-called salario di produttività), thus effectively boosting measures adopted in previous years. 

Key aspects of Industry 4.0 include:

  • Increase the tax credit for R&D costs in the 2017-2020 period to 50%, thus increasing it from 2012-2014, with a cap of €20m per beneficiary. This tax credit is not only available to Italian companies, but also for foreign companies that have a permanent Italian presence and conduct research and development for companies based outside Italy;
  • For tax purposes, 250% of investment in new tangible assets, equipment and technology to develop innovative products and processes can be amortised;   
  • Contributions between €20,000 and €2m to cover part of the interest paid by the company for bank funding;
  • Introduction of optional favourable tax treatment for income from the use of intangible assets: industrial patents, registered trademarks, industrial designs and models, know-how and software protected by copyright; 
  • Finally, the option to pay a reduced or lump-sum tax (fixed rate of 10%) on performance bonuses paid to employees based on collective bargaining agreements signed with trade unions.

These are significant measures offering substantial benefits for companies looking to innovate. They require a detailed business plan of activities to document the costs incurred and to prove these qualify as Industry 4.0 measures under the new laws and regulations.

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