Budget Law 2019 – Measurements to support companies

The Budget Law Draft of 2019 includes a few provisions to support companies, some already proposed before, and others with new formulations.

Among these last ones is  the introduction of an incentive regime consisting of taxation with a reduced IRES tax rate by nine percentage points (from 24% to 15%) of the income declared by companies, limited to the corresponding quota to the profit of the previous tax period allocated to the available reserves, and for the amount not exceeding of:

  1. investments made in new materials, instrumental assets referred to the ones mentioned in Article 102 of the TUIR;
  2. the cost of employees hired under fixed-term or permanent employment contracts.

Investments in instrumental material assets include the construction of new facilities in the territory of the State, the completion of suspended works, the expansion, reactivation, modernization of existing facilities and the purchase of new materials, including leasing contracts, intended for structures located in the territory of the State. Properties and company vehicles for employees are excluded.

Personnel costs is recognized on the condition that the personnel is employed for most of the period in production facilities located in the State and only with an increase in the average total number of employees compared to the number of employees hired by 30 September 2018.

Both parameters must be taken with specific reference to the incremental share recorded in the financial year compared to the amount of the previous year.

The advantage is also applicable for IRPEF purposes (with a reduction of the rates of nine percentage points) with reference to the business income declared by individual entrepreneurs and by partnerships, both in the ordinary accounting system and (with appropriate additions) under the simplified accounting system.

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A further incentive introduced by the Draft are grants, in the form of vouchers, for SMEs and business networks that invest in innovation and digital technologies.

This measure aims to promote the acquisition of specialist consultancy services provided by consultants (companies and “managers”) registered in a special list established by the Ministry of Economic Development, with specific skills aimed at supporting the company in the process of:

  • technological and digital transformation through enabling technologies accepted by the National Business Plan 4.0;
  • modernization of management and organizational structures, including access to financial and capital markets.

The amount of the voucher will be equal to 50% of the costs incurred, for a maximum value of Euro 40.000. The advantage will only cover the costs incurred in the two-year period 2019-2020.

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Please note that the Draft of 2019 Budget Law provides for the repeal, starting from 2019, of the assistance to economic growth (ACE).