Patent Box

“Patent Box”, firstly introduced by Budget Law for fiscal year 2015, was recently updated by law Decree number 34/2019. The tax break is aimed at stimulating company to increase their R&D investments through the introduction of a tax credit (both for corporate and regional tax purposes) based on the amount of the expenses sustained.
The tax credit granted can be equal up to 50% of the income generated by the use of certain kind of intangible asset.
Purpose of this provision is:
– Stimulate relocation of intangible asset to Italy;
– Avoid de-localization of Italian assets abroad;
– Increase R&D investment.
The option for the regime is elected through income tax return, it is valid for five years and is irrevocable. Intangible assets which can access the regime are:
1. Industrial patents;
2. Software;
3. Know-how;
4. Designs or models (trademarks are not included since 2017).
Intangible assets generating income can be used directly by the proprietor or can be granted for use to third parties. In the first case, it is mandatory to file an advanced ruling to Revenue Agency, detailing the amount of the incomes generated, aimed to agree in advance the amount of the available tax credit. It is also possible a self-assessment of the tax benefit, avoiding the ruling procedure. If the intangible is in use to a company part of the same group the ruling is not mandatory.

Professionals at Andersen are at your complete disposal to provide you with the necessary clarifications in relation to the subject detailed in the article.