Patent Box
Our firm provides the necessary consulting and assistance for applying the tax benefits derived from the Patent Box regime, as outlined in the new 2021 regulations (Article 6 DL 146/2021), which replaced the previous rules under Article 1 of Law 190/2014.
The benefit of the new Patent Box regime consists of a super deduction of 110% of costs incurred for maintaining and enhancing existing intangible assets, as well as for R&D costs for new intangible assets. While the former is deductible in the year it is incurred, the latter is deductible in the year the industrial property right is obtained, retroactively covering the costs incurred in the previous 8 years leading up to the year the right was granted. For example, if a qualifying intangible asset receives an industrial property title in 2024, the 110% super deduction applies to all R&D costs related to its creation, dating back to 2016.
This tax benefit applies regardless of whether the intangible asset generates revenue or taxable income.
For example, assuming costs of €100,000 for maintaining and enhancing existing intangible assets, and R&D costs qualifying for the tax relief, the total deductible amount would be €210,000, broken down as follows:
The benefit of the new Patent Box regime consists of a super deduction of 110% of costs incurred for maintaining and enhancing existing intangible assets, as well as for R&D costs for new intangible assets. While the former is deductible in the year it is incurred, the latter is deductible in the year the industrial property right is obtained, retroactively covering the costs incurred in the previous 8 years leading up to the year the right was granted. For example, if a qualifying intangible asset receives an industrial property title in 2024, the 110% super deduction applies to all R&D costs related to its creation, dating back to 2016.
This tax benefit applies regardless of whether the intangible asset generates revenue or taxable income.
For example, assuming costs of €100,000 for maintaining and enhancing existing intangible assets, and R&D costs qualifying for the tax relief, the total deductible amount would be €210,000, broken down as follows:
- €100,000 deductible "normally" according to accounting rules;
- €110,000 deducted extracontably as a reduction in the tax return.
Industrial property rights include:
- Copyrighted software;
- Industrial patents (including patents for inventions, biotechnological inventions, and related supplementary protection certificates), utility models, plant variety rights, and topographies of semiconductor products;
- Legally protected designs and models;
- Two or more of the above intangible assets connected by a complementary relationship, enabling the production of a product or family of products, or a process or group of processes, to depend on their joint use.
These assets may be used directly or indirectly in conducting business activities.
Eligible costs include those related to investments as defined by the Ministry of Economic Development’s decree of May 26, 2020, which governs the R&D tax credit:
Eligible costs include those related to investments as defined by the Ministry of Economic Development’s decree of May 26, 2020, which governs the R&D tax credit:
- Activities classified as industrial research and experimental development under Article 2 of the decree (related to the R&D tax credit);
- Activities classified as technological innovation under Article 3 of the decree;
- Activities classified as design and aesthetic creation under Article 4 of the decree;
- Legal protection of rights over intangible assets.
Relevant activities also include those carried out under research contracts with universities, research institutions, and equivalent bodies, as well as contracts with companies not directly or indirectly controlled by, controlling, or under common control with the enterprise.,
Eligible costs include:
Eligible costs include:
- Personnel expenses (employees or independent contractors) directly involved in relevant activities. For employees, eligible costs include gross wages, social security contributions, severance payments, additional monthly payments, holidays, and leave related to time spent on relevant activities, including travel allowances.
- Depreciation expenses, leasing payments, and other expenses for tangible and intangible assets used in relevant activities.
- Consulting and equivalent services related exclusively to relevant activities.
- Expenses for materials and supplies used in R&D activities.
- Expenses related to maintaining, renewing, and protecting intangible assets, including anti-counterfeiting activities and litigation aimed at safeguarding these rights.
These costs, which are already considered for determining the R&D tax credit, can also apply to both the R&D tax credit and the new Patent Box, meaning the two incentives are cumulative.
The "super deduction" option:
The "super deduction" option:
- Lasts for five tax periods;
- Is irrevocable;
- Is renewable.
For further information, contact c.orsini@studiassociato.it
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