New tax credit


The tax credit is a ‘general purpose’ concept in the broad panorama of tax recovery tools: it ranges from sanitation (Covid-19) to depreciation for capital goods, from dividends to capital increases, and even training if it involves so-called ‘4.0’ technologies (artificial intelligence, virtual/augmented reality, machine learning, etc.).

In business practice, however, one of the most popular tools has always been, and still is, the tax benefit generated by investing in research and development.

The official government sources, through the Ministry of Economic Development, outline it in a concise, but rather effective way: ‘[…] the measure aims to stimulate private expenditure in research, development and technological innovation to support the competitiveness of enterprises and to encourage their digital transition processes [...]’.

Over the last five years, the discriminating factors in terms of tax recovery have shifted variously from the qualification to the nature of the staff employed: a distinction has been made between graduates who have degrees in technical-scientific disciplines and those who do not, rather than between employees (potentially capable of maintaining know-how in the company) and external personnel (less rewarding, in terms of the potential dispersion of knowledge). Of course, personnel costs are not the only elements that have benefited from recovery: the incentives have also facilitated contractual relationships with universities and research centres and encouraged investment in industrial patents and the purchase of goods directly related to R&D.

Finally, the benchmark for the calculation was based on the so-called “incremental investment“, i.e. the company’s ability to increase its investments during the year compared to a pre-established three-year average (2012-2014). The end result was a tax recovery of between 25% and 50% compared to this increase.

Due perhaps to a not excessively favourable economic situation, today the incentive mechanisms have changed profoundly both in terms of how they are calculated and in their overall budget: on the one hand, companies have been allowed to count absolute investments, while on the other hand a strong differentiation of contribution has been imposed according to the nature of the R&D activities.

From 2020 onwards, we must therefore think in two ways: fundamental research, industrial research and experimental development in science and technology on the one hand, and technological innovation (but also design and aesthetic conception) aimed at producing new or substantially improved products or production processes on the other. The former benefit from rates of up to 12% on the investments made, the latter from no more than 6%. The basic concept obviously rewards the ‘distance’ between the investment and the market launch and return.

It is now more difficult than ever, even for large corporations, to obtain an appreciable benefit that is worth the effort it requires. In other words, in terms of the trade-off between costs and benefits, there is the possibility that capitalised knowledge will not be translated into business opportunities, at least not to an acceptable extent and within an acceptable timeframe.

The SCAI Group offsets this complex situation by differentiating not only the nature but also the methods of investment: the tax credit is thus combined with tried and tested co-financing mechanisms for industrial research and experimental development projects (regional, national and European), increasing not only the overall economic benefit but also the capitalisation of expertise, the domains of application of new technologies, and the level of partnership that can be achieved.

Particular attention is also paid to the judicious use of the available funds for the promotion of additional competitiveness factors (training and others), respecting the right balance between the group’s priorities and the structural limits imposed by national competition rules, such as the well-known ‘de minimis’ notice. 

Key Contact
Andrea Stirpe