The news regarding the R&D tax credit for medicines and the introduction of the certification of the research, development, and innovation tax credit

Simplification decree – the R&D tax credit for medicines

In 2021, the Sostegni bis Decree introduced a specific subsidy for medicines research and development activities, including vaccines. In particular, the law provided a tax credit of 20% of the costs incurred from 1 June 2021 to 31 December 2030 for the research and development of medicines and vaccines. The Simplification Decree introduced some changes to the rule in question, eliminating the reference to “new” medicines and vaccines so that the facilitation is up to companies that carry out research and development on medicines and vaccines, even if they are not new. This novelty considerably extends the scope of the application of the subsidy. As specified by the report to the decree, the modification was necessary since the pharmaceutical sector’s research and development activity is always innovative also when the medicine is in its first production. A second significant change concerns the definition of the research and development activities eligible for the subsidy. The Simplification Decree has clarified that the provisions of Article 2 (first and second paragraphs) of the decree of the Ministry of Economic Development of 26 May 2020 apply to define these activities.

Simplification Decree – R&D tax credit certification

The Simplification Decree introduces the possibility of requesting a certification that certifies that the investments made can be qualified as expenses for research and development, technological innovation and design and aesthetic innovation. This certification eliminates any operational uncertainty in the application of the regulatory framework. Can also be requested a certification to qualify technological innovation activities aimed at achieving digital innovation 4.0 and ecological transition objectives, to apply the increase in the tax credit rate provided for by paragraphs 203, 203 quinquies and 203 sexies of article 1, Law no. 160/2019. Certification cannot be requested if tax credits violations have already been ascertained, even with accesses, inspections, verifications, or other administrative assessment activities. The certification is issued by persons who comply, in the evaluation process, with the Ministry of Economic Development guidelines. The certification has binding effects on the Financial Administration if it is not issued for an activity other than that carried out due to a false representation of the facts.