2025 Budget Law: Updates on Tax Credits and Incentives
January 10, 2025
The 2025 Budget Law brings significant updates to tax incentives, with adjustments to tax credits for research and development, technological innovation, design, Transition 4.0 and 5.0, as well as the introduction of the IRES premium tax rate.
The tax credit for investments aimed at reducing energy consumption is now extended to Energy Service Companies (Esco), with enhanced benefits for photovoltaic modules and an increased incentive rate from 15% to 35% for investments between €2.5 and €10 million.
For Transition 4.0, the tax credit for material assets is confirmed with a spending limit of €2.2 billion and a mandatory pre-approval process. However, the incentive for intangible assets has been abolished starting in 2025.
The extension of ex ante and ex post reporting requirements increases compliance costs, potentially posing challenges, especially for SMEs. Proper documentation management becomes crucial to avoid the risk of losing these benefits.
