The tax credit is calculated on the additional R&D investment exceeding the average expenditure in the baseline 2012-2014 (or “frozen average”). The net benefit, for each year, is equal to the 50% of the expenditure increase versus the baseline.
Although no pre-approval is required, it’s important that an in-depth review of the supporting documentation is provided to the Tax Authority in case of enquiry.
A company requires a minimum of €30,000 of QE per year to make a claim with the maximum benefit capped at €20 million. From 2019, the maximum benefit will be capped at €10 million.
For companies established after 2014 the baseline is 0. For companies established after 2012 the baseline is calculated from the date of establishment to the end of 2014.
From 2017, expenses incurred whilst performing commissioned research are eligible, however, this inclusion can only be considered when R&D activity is conducted by an Italian entity on behalf of a non-Italian one (this new provision also opens up the regime to Universities).
From 2019, the tax benefit is dependent on the type of expenditure incurred - 50% for staff costs, research contracted to universities, research centres, startups, and innovative SMEs; and 25% for collaborators, laboratory equipment, and research advisory carried out by other companies.