2021 will bring €7 billion in incentives to Southern Italy

There is still no certainty as to the contents of the 2021 budget law but, according to leaked news, €7 billion in subsidies has been allocated to the South for 2021.

This wide-ranging budget includes measures such as the extension, from 2021 to 2023, of 'de-contribution' in southern regions, i.e. the 30% exemption from social security contributions paid for employees by private-sector non-agricultural employers. For the first year of the extension, 2021, a financial effect of €5.7 billion has been estimated. In addition to this measure, the SOUTH can count on the extension of the tax credit for investments and the increase in the R&D tax credit.

INVESTMENT TAX CREDIT

For 2021, confirmation of the tax credit for investments in force since 2016 thanks to the 2016 Stability Law (L.208 / 2015 and subsequent amendments and supplements). If the measure was financed with €674 million in 2020, a budget of €1 billion is expected for 2021 in light of the new use estimates. The tax credit will continue to apply to companies operating in the South for investments in machinery, plants, and equipment relating to an initial investment project, with breaks of up to 45% for small businesses, 35% for medium-sized enterprises, and 25% for large entities.

The measure has met with growing success among companies over recent years, thanks also to the full accumulability with the incentives of the National Industry 4.0 Plan (super and hyper-depreciation)/Transition 4.0 Plan (tax credit for capital goods). For example, for companies in Calabria, Apulia, Campania, Sicily, Basilicata, and Sardinia, an accumulative contribution of up to 85% has been reached in 2020. For businesses based in Abruzzo and Molise, accumulability allows a bonus of up to 70%.

From 2021, the Tax Credit for investments in capital goods referred to in the Transition 4.0 Plan should also be extended, opening up even more profitable accumulation opportunities.

Let’s summarise the key features of the new version of the Tax Credit for investments in capital goods applicable to all companies, according to the latest information leaked...