Super and Hyper-depreciation in the budget law for 2019

The draft of the budget law for 2019 introduces new measures in the regulation of super and hyper-depreciation. These two tax breaks, allow companies to benefit from increased fiscal amortization, in excess of the purchase cost of new capital goods.

The budget law, still under discussion, in its draft version provides an extension for the hyper-depreciation, but not for the super-depreciation that will cease at the end of 2018. Unless any last minute unforeseen change, starting from 2019 the requirements for accessing the measures will be the following:

  • the super-amortization will apply only for assets purchased before June 30,  2019, under the condition that, by the end of 2018, the corresponding purchase order is accepted by the seller and down payments are made for, at least, 20% of the asset value;
  • The extension of the hyper-depreciation is provided for purchases made during the whole fiscal year 2019 but with a sensible reduction of the tax advantage. The unique150% extra rate will be reduced, and  three new rates, connected to the investment value, will become applicable.

In particular, the fiscal base for calculation of hyper-depreciation, will be increased by:

  • 150% for investments up to 2.5 million euro;
  • 100% for investments between 2.5 and 10 million euro;
  • 50% for investments between 10 and 20 million euro.

Meaning that a maximum investment ceiling is envisaged: the tax advantage will not be applicable to investments exceeding 20 million euros.

The purpose is to support companies that invest in new capital goods, tangible and intangible assets (software and IT systems) functional to the technological and digital transformation of production processes encouraging, with the new rates, especially small and medium-sized enterprises.

We also remind that, in order to take advantage of the hyper depreciation, the company must produce a declaration by the legal representative, or a sworn technical appraisal issued by an engineer or an industrial expert included in professional registers (if the acquisition cost is higher than 500 thousand euro), which states that:

  • the asset has the technical features such as to include it in the list of Attachments A or B required by the 2017 Stability Law;
  • the asset is interconnected with the business management system of production or supply network.

The hyper-depreciation does not apply to capital assets with an amortization coefficient lower than 6.5%, for buildings and constructions and for assets listed in annex 3 of the law 2016 stability.