MONTHLY TAX UPDATES FOR INTERNATIONAL PEOPLE AND CORPORATIONS
The Italian Tax System is renewing to better fit taxpayers needs and international environment. Thanks to the assistance of Manuela Stefoni, international legal tax expert, to follow you will find monthly tips on the Italian Tax system in order to help International individuals and corporations in their life and activities.
ITALY REAL ESTATE:
As with automobiles, it will now be possible to rent-to-buy one’s first home.
The Italian Government has approved an amendment to the 2016 Stability Law, which lays down the rules for the starting up of property leasing. The amendment clarifies that with finance lease contracts, the bank or intermediary commits to purchase or construct the real estate based on the choice and indications of the user who will pay “rent” for an agreed upon period of time; upon the expiration of the contract, the user will be able to purchase the home at a pre-determined price.
The consideration, or rent, that the user will pay to the intermediary must take into account the purchase or construction price and the duration of the contract. Should the contract be terminated through the fault of the user, the lessor or the intermediary will be entitled to the return of the property. In the event the user encounters certain difficulties, such as loss of a job, it will be possible, only once, to suspend the payment of the periodic rent for a maximum period not to exceed twelve months. Said suspension will not entail any commissions or other costs. The amendment allows for the use of this new measure, as an alternative to a mortgage, for a period of 5 years, i.e., from 2016 to 2020.
R&D CREDIT FOR ENTERPRISES:
Should you have company operating in Italy you should be aware of the R&D credit available in Italy. On March 16, 2016, the Italian Tax Office Ruling (n° 5/E) concerning the R&D Tax Credit provided by Italian Law (Financial Bill Law n° 190/2014) was published.
The document contains many important explanations and specifications; in particular, it is worth highlighting that the incentive can be used by Italian branches of foreign enterprises also opened after FY 2015.
Succinctly summarized, the Tax Credit regards:
- enterprises that invest in certain R&D activities during the period 2015-2019;
- the credit is calculated on an incremental basis, up to € 5ML per year;
- an annual minimum investment of € 30,000 per FY is required;
the annual R&D costs incurred have to be higher than the average of the same costs incurred in the 2012 to 2014 FY (the NewCo entities are easier, as they have no past periods to compare).
The Tax Credit is equal to :
- 50% of the costs related to specific qualified personnel involved in R&D activities;
- 50% of the costs derived from research agreements signed with universities, comparable research bodies or innovative start-up businesses;
- 25% of the depreciation costs related to laboratory instruments or equipment;
- 25% of the costs related to the purchase of know-how, patent rights for industrial or biotechnological invention patents, semiconductors or new plant varieties.