Tax Pills

Italy’s R&D tax credit extended and increased sounds more appealing. The Revenue Agency illustrates the new fiscal changes adopted through 2017 Budget law
Among the major changes following Italy’s 2017 Budget law publication in the official Gazette on 22 December 2016, the R&D tax credit is extended through 31 December 2020 and is increased to 50%, previously it was 25% or 50% depending on the type of cost, of the annual R&D incremental expenditure (of any type) exceeding the average spending of fiscal years 2012, 2013 and 2014. The annual cap has also been escalated to 20 million euros per year from the previous 5 million euros.
Larger bounds for the R&D tax credit - As from 1 January 2017, the benefit also may apply to resident companies, Italian permanent establishments of nonresident companies included, that carry out R&D activities through contracts with entities that are resident for tax purposes in Eu/European Economic Area (Eea) countries or in other countries and territories that allow an adequate exchange of information with Italy.
Taxes on research and development, new clarifications in details - With circular n.13/E, drawn up in agreement with the Ministry of Economic Development, the Agency provides accurate instructions to companies that intend to take advantage of the renewed incentive, specifically in the light of the changes introduced, in order to strengthen the fiscal appeal of this instrument and make it simpler to manage and more attractive. Among the changes that apply as from 1 January 2017, one more year is granted to make ad hoc investments in research and development sectors, whereas the maximum annual amount of the tax credit each beneficiary can cumulate increases from 5 to 20 million euro. At the same time, the rate increases to 50% and becomes unique for all types of eligible expenses. And again: resident companies that carry out research and development on behalf of non-resident contracting firms are also eligible for the R&D and the same is for the costs of all the staff employed in R&D, regardless personnel diplomas and professional qualifications.
One more year for de-taxed investments – It has also been extended over one year the time period within which interested companies may make qualified investments. Particularly, as a result of the changes made by the 2017 Budget law, taxpayers whose tax year coincides with the solar year can take advantage of the fiscal relief, other than for the investments made during the 2015-2019 tax period, even for those made during the tax year 2020. Similarly, subjects with a tax period not coinciding with the solar year may qualify for the tax credit for investments made from the tax period 2015-2016, until 2020-2021.
Multiplied the maximum initial limit for the R&D tax credit - The annual maximum amount of tax credit recognized to each beneficiary grows from 5 to 20 million euros, provided that the costs incurred for research and development must be at least € 30,000 in the tax period during which the credit is claimed. For the first two eligible periods, the tax credit is within the limits of the maximum annual amount of 5 million euros, while for the remaining four eligible periods the benefit falls within the limits of the new maximum ceiling. With regard to the time of claiming the tax credit, it can only be used in compensation starting from the tax period following the one in which the costs for R&D activities were incurred.
The tax credit for research and development activities can be also eligible for activities carried out for foreign contractors – As redesigned bi the 2017 Budget law, the R&D tax credit can be applied also on activities carried out by companies operating in Italy on the basis of contracts with foreign firms. As a result of this change, the resident enterprise who "carries out research and development activities" on behalf of non-resident clients is thus equated, for eligible fiscal purposes, to resident operators who "invest" in research and development.

Google and the Italian Revenue Agency. The fiscal peace will be worth more than 300 million euros. The Web-giant will pay over 306 million euros to the Revenue Agency
Italy’s Revenue Agency and Google have just signed the tax settlement to solve potential tax disputes concerning the fiscal investigations, conducted by the “Guardia di Finanza” – Italy’s Financial Police - and co-ordinated by the “Procura” – Prosecutor’s Office - of the Republic in Milan, for the period between 2009 and 2013.
Google will pay a total of over € 306 million, including the amounts referring to the 2014 and 2015 biennium and to an old dispute over the 2002-2006 period. The amounts refer to both Google Italy and Google Ireland.
Looking to the future of the new fiscal relation - With Google will also start a process towards the adoption of advance tax rulings for the correct taxation in Italy of future activities conducted in our country.
Today’s tax agreement in details - In particular, the account to be paid with the Italian Revenue is around 300 million euros, 306 to be more specific. This will be the price that Google will pay to sanction a tax dispute arising from unpaid taxes on a total turnover of 1 billion euros of gross revenues between 2009 and 2013. After more than 1 year of negotiations, today has been signed the definitive fiscal agreement between the tech giant and the Revenue Agency. It is an ad hoc tax settlement that will decree the final peace between Google and the Italian State.
Not only just a current fiscal victory - The agreement that will also recognize the stable organization in Italy of Google, will allow in future years the Revenue Agency to collect the Web giant taxes more commonly. Put differently, Italy’s Revenue Agency will keep collecting regularly the taxes due also in the coming years. And this is not a little or an occasional fiscal gain.
The advance tax ruling at glance – This institute has been specifically and factually devised by countries of common law. The main aim is to give taxpayers the possibility to obtain a preventive and written opinion, in this case by the Italian Revenue Agency, providing the correct application of specific tax provisions.
Particularly, qualifying persons are both resident and non-resident taxpayers entitled to forward the query to the Italian Revenue Agency. The query has to be submitted before the application of the tax provisions.
As far as the benefits are concerned, once the ruling has been signed by both parties, the Italian Revenue Agency cannot issue assessments or impose fines or penalties that would be in contrast with the opinion expressed in the advance ruling.
FiscoOggi è una pubblicazione dell'Agenzia delle Entrate - Ufficio Comunicazione
Testata registrata al Tribunale di Roma il 19.9.2001 con n. 405/2001
Direttore responsabile Claudio Borgnino