On April 30, 2019, Italy published Law Decree No. 34 (the “Law”) in the official gazette, which includes amendments to the patent box incentive regime.
Article 4 of the Law includes changes to the patent box rules. Beginning from the tax period during the Law’s entry in force, companies which opt for the patent incentive regime referred to in Article 1(37) to (45) of Law No. 190 can determine and declare eligible income, indicating the required information in appropriate documentation within 90 days of the Decree’s effective date. The taxpayer who holds the documentation must notify the financial administration in the declaration concerning the tax period for which the benefit is granted.
The patent incentive covers five fiscal years and the election is irrevocable. Income derived from the use of software protected by copyright, industrial patents, designs, or by processes, formulas, and information related to legally protected experience acquired in the fields of industry, commerce or science shall not be included in total income, since 50% of the relative amount is excluded. The patent incentive also applies to income derived from the joint use of intangible assets.
Gains arising from the sale of goods mentioned above are not included in total income, provided that at least 90% of the consideration arising from the sale of the goods is reinvested before the end of the second fiscal year following the year in which the sale occurred.