Circular 9 / E: tax credit for the purchase of capital goods

Circular 9 / E: tax credit for the purchase of capital goods

Circular 9 / E of 23/07/2021 of the Revenue Agency provides some indications concerning the methods of applying tax credits for the purchase of new capital goods.

The tax credit for capital goods is a support for companies that want to invest in new tangible or intangible assets. The aim of the incentives is to encourage the digitization of production processes.

The circular provides some clarifications on the rules governing depreciation and concessions in the new budget law 2021 (law 178 of 12/30/2020). Furthermore, as an official interpretative document, it invalidates any regional indications with instructions other than those contained therein.

Circular 9 / E: structure and themes

The circular meets a total of 23 requirements and is divided into seven chapters dedicated to different topics:

  • Stakeholders
  • Investments
  • Time frame
  • Determination of the facility
  • Usage
  • Cumulation with other concessions
  • Redetermination of the facility
  • Documentation

Below we will report the answers elaborated in the document faithfully following the order of the circular.

Stakeholders

The first section clarifies which entities can benefit or not from the tax credit for capital goods. It is attributed to “all businesses resident in the territory of the State […] regardless of the legal form, the economic sector to which they belong, the size and tax regime for determining the business income”.

In the second question, the circular specifies that companies that are in a state of crisis, liquidation, bankruptcy or recipients of disqualification sanctions. In the latter case, the exclusion will be equal to the interdiction period.

Finally, those subjects whose main activity is the professional one and how can also benefit from the tax credit secondary activity that of business.

Investments

In this second section, the circular explains that investments made through contracts of leasing (or lease). Furthermore, since there is no minimum amount of investments to access, also the goods with a lower unit cost are included in the tax credit and 516.46 euros.

Time frame

The third section of the circular clarifies the doubts about the overlapping periods of the different regulatory disciplines. In particular, the section refers to the period between 16/11/2020 and 30/06/2021. In this period, incentives are provided for both by the Budget Law 2020 and by the Budget Law 2021.

the document explains that among the investments made by 15 November 2020, we distinguish those in which "the binding order has been placed and the deposit of 20 per cent has been paid, in the case of investments for which such conditions have not been met at the aforementioned date"(Ref. P.16 circular 9 / E).

In the case of the payment before 11/15/2020, the investments refer to the previous legislation, therefore to the 2020 budget law. In the case of a subsequent payment, the indications introduced by the 2021 budget law apply.

Determination of the facility

This section makes it clear how the tax credit is determined for business networks.

The circular distinguishes the contract-networks and the subject-networks. The former are a group of independent companies whose work is regulated by a collaboration contract. In this case, the tax credit is applied independently to each of the individual companies. The latter are a set of cooperating companies that have given birth to a new legal entity. These can benefit from the tax credit as a single entity.

Another point concerns the goods redeemed in leasing. The Revenue Agency believes that for the determination of the tax credit "assumes the cost incurred by the lessor for the purchase of the goods"(Ref. P.23, ref. 1054 budget law 2021).

To calculate the tax credit due to the lessee, the redemption price is of no importance, but the "cost for the purchase of the asset”Supported by the lessor.

In this way there are no credit differences between those who choose to buy through leasing and who through traditional buying and selling.

Later we will explain what happens in the event of failure to redeem the asset or transfer of the contract leasing.

Usage

This chapter explains what the requirements are for accessing the tax credit for investments in new tangible assets. In particular, it is specified that the exhibitors of arts and professions, or those who carry out self-employment, can benefit from the tax credit.

Furthermore, the absence or irregularity of the DURC (Single document of contribution regularity) precludes the use of the tax credit.

Instead, on the question of timing and the sharing of quotas the document specifies that:

  • it is possible to continue to use the tax credit beyond the third year following that of entry into operation. This applies to goods other than those relating to "Industry 4.0";
  • for the assets of Industry 4.0 it is possible to continue to use the tax credit beyond the third year following the year of interconnection. This applies in the event that it is not possible to compensate everything in the foreseen period;
  • in the event that the annual fee, or a part, is not used, the residual amount can be reported in the returns of subsequent tax periods. This also applies beyond the third year limit.
circolare 9E

Delay in interconnection

An interesting question clarified in this section is that relating to a possible late interconnection. The circular specifies that even in the event of a delay in interconnection, the taxpayer can in any case benefit from the tax credit.

In particular, the interconnection requirement could be "satisfied even after the investment and commissioning of the asset; and this, precisely to allow the company to be able to equip itself or to be able to adapt the IT systems to which the asset [..] will have to interconnect"(Ref. P.35 circular 9 / E).

It should be remembered that the asset must already be equipped with the technical characteristics that the 4.0 paradigm requires at the time of its first use, under penalty of revocation of eligibility for 4.0 benefits.

Circular 9 / E reads: "The facility does not cease to exist as long as the technical characteristics, required by the 4.0 discipline, are already present in the asset before its first use or commissioning"(ref. p. 36).

Therefore, if the 4.0 asset comes into operation without being interconnected, the taxpayer has two possibilities:

  1. enjoy the “reduced” tax creed from the year the asset comes into operation, and from the year in which the interconnection took place, make full use of it;
  2. wait for the interconnection and take full advantage of the tax income for 4.0 goods at a later time.

In any case, compliance with the technological characteristics and the interconnection requirement must be maintained for the entire period of enjoyment of the 4.0 benefits.

Cumulation with other concessions

In this section of the circular it is specified that the tax credit for the purchase of capital goods is cumulative with other concessions, provided that it does not exceed the cost incurred.

For cost incurred means the total amount of eligible costs taking into account the period in which the taxpayer intends to avail himself of the tax credit.

Redetermination of the facility

In the last section, the circular lists the consequences of a failure to redeem the property or the transfer of the contract of leasing (in the event that the investment is made through a lease agreement).

The circular specifies that in these two particular cases a re-determination of the incentive is carried out. The tax credit is reduced by excluding, from the total amount, the cost incurred by the lessor for the purchase of the asset. The total amount means the sum of all the costs of the goods admitted to the concession.

On the contrary, the tax credit will not be reduced in the event that the asset is transferred to a company of leasing through an operation of sale and lease back.

Documentation

The last section of circular 9 / E deals with the documentation relating to the acquisition of assets. This must necessarily bear the reference to the facilitating provision to which the goods are subject.

In this regard, the regulatory reference to be indicated for the acquisitions of eligible assets that took place starting from November 16, 2020 is clarified:

  1. For investments for which a binding order has been placed on November 15, 2020 and the 20 percent deposit has been paid, the related invoices and other purchase documents must contain reference to the provisions of the budget law 2020.
  2. For investments undertaken starting from November 16, 2020 - for which, that is to say, as of November 15 there has been no order and / or payment of the 20 percent down payment - invoices and other documents of purchase of admissible assets must report the reference to the facilitating discipline of the budget law 2021 ″.

It is possible to regularize the documents already issued without correct indication of the reference legislation, according to the procedures indicated in the response to request for ruling no. 438 of 5 October 2020.

For detailed information on the subject, we refer to full text of Circular 9 / E of the Revenue Agency

We remind you that this article incorporates summary information that has no legal value, but that we can guide you in the digitization process for get 4.0 concessions on your vehicle.

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