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R&D Tax Bonus: Even for Branch of Non Resident Companies

Italian legislation grants, since 2015 and till 31th December 2020, a tax bonus to the resident companies for the investment in research and development (R&D).

Every company, based in Italy, is entitled to obtain this tax bonus, that is represented by a deduction for every kind of taxes or social security contributions due.

The bonus is 50% calculated on the incremental R&D expenses done every year (2015 – 2020) compared to the average investments made by the company in the previous 3-year period (2012-2014), with a minimum amount of 30.000€ credit and a maximum amount of 20 million credit per year.

According to the law, companies that does not have a 3-year period to compare can obtain the bonus comparing the R&D expenses of every year alternatively with the period between the foundation and the 31th of December 2014 or, if founded after 2014, the total expenses of R&D made Avery year.

Italian tax administration, in 2017, has examined also the case of an Italian resident company that made R&D for its mother company based in UE or non-UE, but anyway in countries that guarantee an exchange of information with Italy, and the answer provided was positive.

Companies owned by UE or non-UE resident companies, but anyway in countries that guarantee an exchange of information with Italy, that made R&D for their mother companies can obtain the tax bonus.

The tax credit is not subject to any prior authorization and can be used from the first of January the subsequent year, to be able to use it will be necessary only to document the expenses incurred, indicate the credit in the tax return and have the expenses certified by an auditor.

Even the expenses incurred in the years 2015 and 2016 can still guarantee the benefit, paying a minimum fine, the only obligation is to re-submit the tax return for these years and have the auditor certify the expenses.

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Federico Rossi's picture

Federico Rossi has been focused on tax and administrative matters mainly about commercial companies, automotive, real estate and metal processing clients, Mr. Rossi has also focused in individual repatriation fiscal benefit.
Other practice included m&a, tax planning, corprorate formation and tax compliance.