In line with some models that have been already adopted in many other European Countries (such as Belgium, France, United Kingdom, Luxembourg, Netherlands, Portugal, Spain), the Italian Government introduced, with the financial law of 2015, a facultative taxation option to benefit from a lighter regime: the Patent Box.
The new instrument would allow to those having taxable business income, without any limit arising from the sales volume and independently from the business structure, to avail themselves of a deduction system equal to 50% of incomes originating from the employment of intangible goods (software with copyright, industrial patent, including the invention licenses, registered trademarks or with underway registration, drawings and models). In addition, also the rent coming from the grant in use of the abovementioned intellectual products will fall within the fiscal benefit.
According to the Financial Law of 2015, the patent box should have found indiscriminate application for all intellectual property rights; nevertheless, the implementation Ministerial Decree, successively confirmed by the Financial Law of 2016, established that, among the intellectual property rights, only the softwares protected by copyright would take advantage of the benefit.
Companies and any institution, trust included, could endorse it at the only condition of residing in countries where treaties to avoid the double taxation already entered into force (among the others Albania, Algeria, Argentina, Australia, Austria, Bangladesh, Belgium, Brazil, Bulgaria, Canada, Czechoslovakia, China, Cyprus, South Korea, Ivory Coast, Denmark, Ecuador, Egypt, United Arab Emirates, Estonia, Ethiopia, Russia, Philippines, Finland, France, Georgia, Germany, Ghana, Japan, Greece, India, Indonesia, Ireland, Israel, Kazakhstan, Kuwait, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Morocco, Mauritius, Mexico, Mozambique, Norway, New Zealand, Oman, Netherlands, Pakistan, Poland, Portugal, United Kingdom, Romania, Senegal, Singapore, Spain, Sri Lanka, United States, South Africa, Sweden, Switzerland, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, Uganda, Hungary, Uzbekistan, Venezuela, Vietnam, Zambia).
Another very important innovation, introduced by means of the implementation decree and with the following revision operated by the financial law of 2016, consisted in considering as a unique good all the products that jointly or collectively participate to the finalization of the product.
The Government decree required that the benefit of deducting the 50% of revenues coming from the use of intellectual property products would have been granted only for goods belonging to the same typology, anyway this specification was abolished with the new financial law of 2016. Furthermore, the capital gains originating from the transfer of intangible goods, would also be excluded from the calculation of the business income, at the only condition that at least the 90% of them will be reinvested in research, development, maintenance activities for the growth of other intangible goods.
The benefit consists in a deduction of 30% in 2015, 40% in 2016 and 50% starting from 2017. Companies involved in failure proceedings or compulsory liquidation could not take advantage of the brand new deduction system.
The operation of the deduction option lasts for five fiscal years, it is irrevocable and renewable. Any contributor employing research and development activities directly or availing themselves of third independent parties (universities, qualified research centers). It won’t be necessary that the research and development activities are leaded during the same fiscal year in which the legal persona would benefit of the deductions, it is enough that this activity was conducted in the previous fiscal years. Anyway, it’s necessary that the research and development activities is strictly connected with the generated good. The research and development activity may be conducted also abroad, it is in fact irrelevant the place where the activity took place.
Until 2016 the employment of the option should be directly noticed to the income revenue authority, by way of direct delivery or certified mail), starting from 2017 the subscription of the option must be inserted in the individual income tax return, with effective date from the fiscal year to which the declaration refers.
Sources (Patent Box Act of 23rd December 2014, n. 190 published in the Official Journal n.300 of 29th December 2014), Ministerial Decree of 30th July 2015, Financial Law 2016 (n.208 of 28th December2015, published in the Official Journal n.302 of 30th December 2015)
Milan, 8th April 2016
