Tax credit for research, development, innovation and design (Italian acronym: CIRSID)


The Tax Credit for Research, Development, Innovation and Design (Italian acronym: CIRSID) is an evolution of the incentive introduced by the 2015 Italian budget law (Law n. 190/2014). One of the most appreciated by Italian companies, the incentive encourages one particular capacity which drives growth and competition, namely the ability to bring new products and services to the market, to develop new business models, or to experiment with new process solutions.

It is aimed at all businesses resident in the country, including permanent establishments of non-resident entities, regardless of their legal status, industry, size, accounting system, and the system used to calculate taxable income.

The following activities are supported by the Tax Credit for Research, Development, Innovation and Design, at the tax credit rates stated:

  • Fundamental research, industrial research and experimental development in science and technology fields:
    20% of eligible expenses up to a maximum of €4 million.
  • Technology innovation activities intended to create new or substantially improved products or production processes, as well as to achieve an ecological transition or Enterprise 4.0 digital innovation goal:
    15% of eligible expenses up to a maximum of €2 million.
  • Technology innovation activities intended to create new or substantially improved products or production processes:
    10% of eligible expenses up to a maximum of €2 million*.
  • Design and aesthetics activities (other than those carried out as part of the research and development and technology innovation activities stated in the previous sections) intended to significantly innovate the company's products in terms of visual design and other non-technical or functional elements:
    10% of eligible expenses up to a maximum of €2 million*.

    *overall


The following expenses are eligible for Tax Credit for Research, Development, Innovation and Design:

a1) research and development: spending on researchers and technicians working under employment agreements or self-employment or other arrangements, who are directly employed in the research and development operations carried out within the company (for some categories of employment, the expenses used to calculate tax credit can be combined, reaching tax credit amounting to up to 150% of the expenditure).
a2) innovation: expenses for personnel working under employment agreements or self-employment or other arrangements, who are directly employed in the technology innovation operations carried out within the company, within actual employment limits applicable to these activities.

b) depreciation, finance leases, standard lease or rental fees, and other expenses relating to tangible assets (movables) and software used in Research and Development and/or Technology Innovation projects, including those employed for the construction of prototypes or pilot plants, for the amount ordinarily deductible when calculating business income (for research and development: up to 30% of the expenses stated in section a1).

c1) research and development: expenses for off-site research contracts concerning work carried out directly by the commissioned party consisting of research and development activities eligible for the tax credit (for contracts with Universities and Research Organisations, a rate of 150% is applied to the expenses used as the basis for calculating the tax credit).
c2) innovation: expenses for contracts wherein the commissioned party carries (directly) out the technology innovation activities eligible for the tax credit.

d1) research and development: the amortisation quotas relating to the acquisition (including therein through licences for use), by third parties, of industrial property rights relating to an industrial or biotechnological invention, an integrated circuit layout design, or a new plant variety, up to a total maximum of €1,000,000 and provided that they are used directly and exclusively to carry out activities relating to research and development projects eligible for the tax credit.
d2) innovation: expenditure for consulting and equivalent services concerning technology innovation activities eligible for the tax credit (up to 20% of the expenses referred to in section a2).

e1) research and development: expenditure for consulting and equivalent services concerning research and development activities eligible for the tax credit (up to 20% of the expenses referred to in section a1, or the eligible expenses stared in section c1).
e2) innovation: expenses for materials, supplies, and the like used in technology innovation activities eligible for the tax credit including those employed for the construction of prototypes or pilot plants (up to 30% of the expenses referred to in section a, or the eligible expenses stated in section c2).

f) research and development: expenses for materials, supplies, and the like used in research and development projects eligible for the tax credit carried out internally by the company, including those employed for the construction of prototypes or pilot plants (up to 30% of the costs referred to in section a, or the eligible expenses stated in section c1).

CONSULTING AND ASSISTANCE SERVICE

What we can do for you

  • We monitor and assess opportunities for subsidies and concessions available for specific research, experimental development, innovation, and design projects;
  • we analyse the economic, technical, and financial documents (provided by your company) needed to identify and report expenses incurred for these projects;
  • we produce a technical file illustrating your research, development, innovation, and design projects, we report the relating expenses, distinguishing between those which are eligible and ineligible for the incentive, and we describe the level of innovation of your projects, highlighting the state of knowledge compared to that reached or attempted by other parties. In the latter case, we also check whether existing information on the process or product is accessible and available to the company or not;
  • we produce a report (sworn before a court) and prepare the addendum to the management report and/or to the financial statements;
  • we guarantee the assistance of an expert appointed by us, in the event of any checks regarding the existence and adequacy of the research and development costs identified.

How we do it

By putting a  team of specialists at your disposal to accompany you in the management and use of this interesting incentive, in particular:

  • a commercial consultant with specific expertise, who - after running an initial check to establish the possibility of accessing the 2020 tax credit or on the need/advisability of verifying tax credit already utilised - will coordinate subsequent activities and be responsible for your satisfaction;
  • our Research Department, which investigates every aspect of the legislation and monitors all updates; the Research Department studies the circulars, FAQs, resolutions, and interpretations of the Inspection Authorities, updates the commercial and technical consultants and discusses the issues with the internal team that specialises in the measure in question;
  • the R&D tax credit technical team, which monitors the progress of the applications to ensure every form is filled in on time and provides the technician assigned to the company with support for the more complex aspects;
  • a dedicated technician (usually an engineer), who liaises with the client in the handling of the incentive; the technician will also be in charge of preparing the sworn report;
  • a Customer Services Department, for administrative aspects and gathering paperwork.


Did you know that there are certain concessions that can be combined with the research and development tax credit?

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