INDUSTRY 4.0: USEFUL VALUES ON SUPER AND IPER AMORTISATION
Circular 4 / E, jointly drafted by Agenzia delle Entrate and the Ministry of Economic Development, clarifies bonuses and types of investment to benefit from the super- and hyper-amortisation benefits and allows for the tax measures introduced to give impetus to the modernization of Italian companies and their technological transformation and digitization.
In particular, the 2017 Balance Law foresaw the prolongation of the super amortisation and introduced the iper amortisation, a 150% increase in the cost of acquiring certain assets for the deduction of amortisation and rental rates. The Circular provides guidance on the additional 40% increase in the purchase cost of intangible assets (including some software, IT systems and system integration activities) for those who already benefit from depreciation.
Super and Iper Amortisation compared to tax savings
The different amount of surcharges relating to super and iper depreciation creates a different tax saving, as shown in the table below, which highlights the tax effects of a hypothetical 1 million euro investment made by an Ires subject for the purchase of a good that benefits from the super / iper amortisation over the ordinary depreciation hypothesis.
|
|
Amortisation Ordinary |
Super Amortisation Increase 40% |
Over Amortization Upgrade 150% |
|
Imports deductible for IRES tax |
€ 1.000.000 |
€ 1.400.000 |
€ 2.500.000 |
|
Tax Savings (24% of the amount deductible for IRES tax) |
€ 240.000 |
€ 336.000 |
€ 600.000 |
|
Net investment cost (Investment - tax savings) |
€ 760.000 |
€ 664.000 |
€ 400.000 |
|
Better savings on net investment cost |
|
9.60% (760.000-664.000)/1000.000 |
36.00% (760.000-400.000)/1000.000 |
Source: Revenue Agency - Ministry of Economic Development
In the case of ordinary amortisation, and always starting with an investment of 1 million euros, net tax savings are 240 thousand euros, which become 336 thousand with super depreciation and 600 thousand due to iper depreciation.
Extension of benefit to intangible assets
One of the innovative aspects of depreciation is the extension of the benefit to intangible assets (eg. software). The wording of the rule does not clarify whether the intangible asset should be functionally linked to the asset subject to hyper amortization or not. The Circular clarifies that the mere fact that the person has benefited from the depreciation of capital for having invested in Industria 4.0 assets in 2017 is enough. Therefore, it is not necessary to have a functional link between the intangible asset (software ) for which the benefit is however recognized at 40% and the material benefit of 150%.
As far as software is concerned, the purchase of a mere use license is also a matter of easy-to-use goods provided that the asset is attributable to the asset.
Logical System Team is available for any clarification.
