The major recent changes in the Italian tax rules that occurred in the last 12 months are the following:
- Introduction of the so-called ‘web tax’ as of 2019.
- New 2018 tax deadlines.
- Extension of super and hyper tax depreciation.
- Changes to allowance for corporate equity (ACE).
- Tax credit for advertising campaigns and for training expenses.
- Value-added tax (VAT) changes.
Please note that Italy tax updates are generally expected to occur between November and December in connection with the finance bill and approval of related laws.
Introduction of the so-called ‘web tax’ as of 2019
The 2018 finance bill introduced the so-called ‘web tax’ on digital services applicable as of 1 January 2019. Under this new Law, corporations will apply a tax at the rate of 3% on the value of digital services, net of VAT.
New 2018 deadlines
Some tax deadlines are changed. In detail:
- VAT return is filed by 30 April.
- The communication of data of invoices issued and received regarding the second quarter of fiscal year (FY) 2018 is extended to 30 September 2018.
- For calendar year 2017, returns for corporate income tax (imposta sul reddito delle società or IRES), regional production tax (imposta regionale sulle attività produttive or IRAP), and withholding tax (WHT) are due by 31 October 2018.
Corporations having their tax period different from the calendar year are still filing the IRES returns within ninth months following the financial year-end.
Extension of super and hyper tax depreciation
For new investments in tangible and intangible assets, the additional IRES depreciation has been extended to those carried out in 2018. In particular:
- As for the so-called 'super depreciation', the purchase cost of a tangible asset is now increased by 30%, bringing its taxable basis to 130%.
- As for the so-called 'hyper depreciation', the purchase cost of hi-tech, cloud, ultra-broad band, industrial robotics, digital manufacturing, IT security, etc. investment is still increased by 150%, bringing the IRES base of the asset to 250%.
Specific supporting documentation is required to benefit from these provisions.
Changes to allowance for corporate equity (ACE)
The rate applicable to ACE deduction for FY 2018 and onwards is 1.5% (previously, for FY 2017, the rate was 1.6%).
Tax credit for advertising campaigns and for training expenses
A tax credit is granted for investments in advertising means, such as daily press, magazines, local television, or radio. The tax credit is defined on the increased investment in advertising compared to the previous fiscal year.
Costs of employees involved in training activities to acquire knowledge in the technologies related to the so-called ‘Industry 4.0’ plan are eligible for a tax credit of 40%.
Relevant changes have been introduced on different matters, such as electronic invoicing obligations, broader application of the split payment, reduction of timeline to deduct input VAT, and postponement of the VAT rates increase.