Training 4.0 and digitization: here are some tax breaks. Leyton advises

We had a chat with Luca Annunziata, Leyton Southern Area Manager, to talk about 4.0 training, digitalization and tax breaks.

Leyton is an operations consulting company, founded in 1997 in France, present in 14 countries around the world, and is a strategic partner because it accompanies companies in their technological and ecological 4.0 innovation and transition projects, taking advantage of the fiscal and financial levers that are offered by the state.

Facilities vary depending on the type of company, the region on which each business is located, so this interview cannot and should not replace dedicated consulting, but it can certainly provide you with useful insights and new resources to grow your projects.

Maybe you don't know that you can access tax breaks for:

• the purchase of a machinery or 4.0 capital goods
• a research and development project
• a technological innovation project (an app or a new product)
• the training of your staff.

How do you identify the most appropriate tax breaks for a company?

"Consulting is a tailored suit. Depending on the ATECO code and the size of the company, with the VAT number we download the financial statements and with our team we start a detailed analysis. When we interview the client we are already able to propose opportunities that are on target with their needs.

Our "mission report" is to identify not one, but a range of facilities. We can also take care of regulatory monitoring and financial check up, to identify over time regional calls for proposals that are useful to the entities we follow that have businesses that insist on specific areas, for example."

Are there special facilities for companies in southern Italy?

"Yes, the Mezzogiorno Tax Credit offers greater tax breaks for companies in Campania, Puglia, Basilicata, some areas of Molise, Calabria, Sicily and Sardinia."

Training 4.0 is often talked about, what are the opportunities?

"Training 4.0 benefits have existed since 2020 and allow companies of any sector and size to get a subsidy for activities aimed at training their employees, whether it is one person or several thousand (Leyton deals with practices starting with at least six employees ed.).

Training can be conducted in-house or provided by training providers. The topics of study are different and depend on the sector in which individual companies operate, which can be crosswise manufacturing realities, but also commercial or third sector.

The positive note is that it is not compulsory to have a Training Entity: if the company adopts management, marketing or sales software, for example, all activities dedicated to staff training can be subject to facilitation."

Can expenses incurred in 2021 for Training 4.0 also be recovered?

"Those who have incurred an expense for Training 4.0 in 2021 can still recover it.

For prudential criteria, we say that beyond September-November, the deadline for submission of the company's Unico, we do not go.

In this case, Leyton's task will be to identify, enhance and report on the activities carried out, accompanying the company all the way to the collection of the contribution. Our added value, of course, is expressed when we can work alongside the company and define the project from the beginning to maximize its benefits."

In this case, Leyton's task will be to identify, enhance and report on the activities carried out, accompanying the company until the collection of the contribution. Our added value naturally expresses itself when we can come alongside the company and define the project from the beginning to maximize its benefits."

For Training 4.0, they recently introduced a new feature.

"About a month or so ago, an important novelty was presented: if a company turns to a list of training providers accredited to the MISE platform to do so (the list has not yet been presented), the percentages recoverable in the form of tax credits will be higher.

As a reminder, the benefits related to training facilities will not change for those who are not part of these entities."

How does file approval work?

"There is no prior approval from MISE. Leyton, as an operational consulting company, takes responsibility to the Internal Revenue Service, Finance and the commissioning company, which we also protect from a technical and legal point of view, certifying that that training course, for example, is eligible for facilitation under the regulations. Once the application is submitted, they expect timeframes for disbursement of the facilitation."

Are there currently opportunities for those opening an eCommerce business?

"These opportunities have to be monitored from time to time. Until a month and a half ago, there was the SIMEST call for proposals in which the adoption of an eCommerce platform was included to support the internationalization of the sale of one's products and even marketing activities.

There are still facilities in place for those companies working with war-affected countries such as Ukraine, Russia and Belarus. The SIMEST call in fact wants to cover the loss of turnover by focusing and supporting the business of each one outside these areas."

What is the tax credit for intangible and tangible assets?

"If the purchase of software (we are not talking about a license, but a purchase) falls into the 4.0 categories, it is 50 percent tax credit. If, on the other hand, the licenses purchased are functional for the development of a product or software, then the cost can fall under a technological innovation project."

Luca, can you summarize the main facilitations for us?

"The main facilitations are those related to Training 4.0; tangible and intangible Capital Goods, Research & Development & Innovation, but I invite companies to a dedicated consultancy."

Fact Sheets

Training 4.0 Tax Credit

The measure is aimed at stimulating companies' investment in staff training on subjects having to do with technologies relevant to the technological and digital transformation of enterprises.

With its team, it accompanies companies in their technological and ecological 4.0 innovation and transition projects, taking advantage of the fiscal and financial levers offered by the state at various times.

All enterprises resident in the territory of the State, including permanent establishments of nonresidents, regardless of their legal nature, economic sector, size, accounting regime and system of determining income for tax purposes.

Non-commercial entities are also eligible for any commercial activity carried out, while professionals (or, more precisely, self-employed income earners) are not eligible.

Enterprises in a state of voluntary liquidation, bankruptcy, compulsory liquidation, arrangement with creditors without going concern, other bankruptcy proceedings are excluded. Also excluded are companies subject to prohibitory sanctions under Article 9, paragraph 2, of Legislative Decree No. 231 of June 8, 2001.

Entitlement to the benefit is subject to the condition of compliance with workplace safety regulations and the proper fulfillment of obligations to pay social security and welfare contributions on behalf of workers.

It is recognized a tax credit in relation to training activities, incurred during the fiscal years 2021 and 2022, aimed at the acquisition or consolidation, by the company's employees, of skills in technologies relevant to the realization of the process of technological and digital transformation of enterprises provided by the "National Plan Industry 4.0."

In particular, training activities concerning the following technologies constitute eligible activities for the tax credit:

• big data and data analytics;

• cloud and fog computing;

• cyber security;

• simulation and cyber-physical systems;

• rapid prototyping;

• visualization systems, virtual reality (VR) and augmented reality (AR);

• advanced and collaborative robotics;

• human-machine interface;

• additive manufacturing (or three-dimensional printing);

• internet of things and machines;

• digital integration of business processes.

Eligible expenses for the Training 4.0 tax credit are:

• personnel costs related to trainers for the hours they participate in training;

• operating costs related to trainers and training participants directly related to the training project, such as travel expenses, materials and supplies with direct relevance to the project, depreciation of tools and equipment for the portion to be related to their exclusive use for the training project. Accommodation expenses are excluded, except for the minimum necessary accommodation expenses for participants who are workers with disabilities;

• the costs of consulting services related to the training project;

• personnel costs related to the training participants and indirect overhead costs (administrative costs, rent, overhead) for the hours during which the participants attended the training.

SUBJECTS QUALIFIED TO DELIVER TRAINING

The following subjects can deliver "industry 4.0" training:

• Entities accredited to carry out funded training activities at the region or autonomous province where the enterprise has its registered office or operational headquarters;
• Universities, public or private or to structures linked to them;
• Higher technical institutes;
• Subjects accredited with interprofessional funds according to Commission Regulation EC 68/01 of January 12, 2001;

• Subjects in possession of quality certification according to Uni En ISO 9001:2000 sector EA 37;

• Employees.

The tax credit is equal to:

• 50% of expenses incurred for Small Businesses with a maximum of 300,000 euros per year;

• 40% of expenses incurred for Medium Enterprises with a maximum of 250,000 euros annually;

• 30% of expenses incurred for Large Enterprises with a maximum of 250,000 euros annually;

• 60 percent of expenses incurred if the recipients of eligible training activities fall into the categories of disadvantaged or very disadvantaged employees.

N.B. Decree Law No. 50 of May 17, 2022 (the so-called Aid Decree) increases the tax credit rate to 70% for Small Enterprises and 50% for Medium Enterprises, provided that:

• the training activities are provided by the entities identified by decree of the MISE to be adopted within thirty days from the date of entry into force of the so-called Aid Decree (by June 17, 2022);

• the results related to the acquisition or consolidation of the aforementioned skills are certified in the manner established by the same ministerial decree.

For training projects started after May 18, 2022 that do not meet the above conditions, the measure of the Tax Credit are decreased to 40% and 35%, respectively.

The Tax Credit can be used as an offset from the tax period following the one in which the expenses are incurred, through the agency's online services.

Tax credit for tangible and intangible capital goods

Redefinition of the discipline of tax incentives under the Transition 4.0 Plan regarding the purchase of new capital goods.

The tax credit is available to all companies resident in the territory of the State, including permanent establishments of nonresidents, regardless of their legal form, economic sector, size and tax regime for determining the company's income, that make investments in new capital goods intended for production facilities located in the territory of the State.

The tax credit is not available to companies in a state of voluntary liquidation, bankruptcy, compulsory liquidation, arrangement with creditors without business continuity or subject to other insolvency proceedings provided for by Royal Decree No. 267 of March 16, 1942, the Business Crisis and Insolvency Code, set forth in Legislative Decree No. 14 of January 12, 2019, or other special laws, or that are undergoing proceedings for the declaration of one of these situations. Also excluded are companies that are the recipients of prohibitory sanctions under Article 9, paragraph 2, of Legislative Decree No. 231 of June 8, 2001.

For firms eligible for the tax credit, eligibility for the benefit due is in any case subject to the condition of compliance with workplace safety regulations applicable in each sector and the proper fulfillment of obligations to pay social security and welfare contributions on behalf of workers.

Ineligible expenses are:

• Used goods;

• Means of Transportation;

• Goods having tax rates < 6.5%;

• Buildings and Construction;

• Goods listed in Annex 3 of Law No. 208/2015;

• Goods that can be devolved free of charge.

Eligible expenses are:

• "Ordinary" tangible capital goods (i.e., other than those listed in Annex A attached to Law No. 232 of December 11, 2016);

• "Ordinary" intangible capital goods (i.e., other than those indicated in Annex B attached to the same Law No. 232 of 2016);

• New capital goods indicated in Annex A;
• New capital goods indicated in Annex B.

Research & Development & Innovation Tax Credit

The objective of the announcement is to encourage business investment in research and development, ecological transition, technological innovation 4.0 and other innovative activities.

The tax credit is available to all enterprises that invest in the 2021 and 2022 tax periods in:

• fundamental research, industrial research and experimental development activities in science or technology;
• technological innovation activities aimed at new or substantially improved products or processes;
• design and aesthetic ideation activities.

Different rates are provided according to the type of activity carried out:

• 20% tax credit up to a maximum limit of 4 million euros for research and development
• Tax credit of 10% in the maximum limit of 2 million euros for technological innovation
• Tax credit of 15% in the maximum limit of 2 million euros for technological innovation aimed at the realization of new or substantially improved products or production processes to achieve a goal of ecological transition or digital innovation 4.0
• Tax credit of 10 percent in the maximum limit of 2 million euros for design and aesthetic ideation

The eligible tax credit can be used exclusively by offsetting in 3 equal annual installments, starting from the tax period following the one in which it accrues.

For R&D activities carried out by companies operating in the Mezzogiorno (Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily), the measure of the tax credit is:

• 25% for large enterprises;
• 35% for medium-sized enterprises;
• 45% for small enterprises.

Eligible expenses are:

• personnel expenses;

• depreciation allowances;

• expenses for extra muros research contracts;

• depreciation fees related to purchase from third parties;

• expenses for consulting and equivalent services;

• expenses for materials, supplies and other similar products.

Fund for supporting enterprises damaged by the Ukraine crisis.

Fund of 130,000,000 euros established to address the economic repercussions for domestic enterprises resulting from the international crisis in Ukraine.

The resources of the fund are distributed among eligible enterprises, recognizing to each of them an amount calculated by applying a percentage equal to the difference between the average amount of revenues related to the last quarter prior to the date of May 18, 2022 and the amount of the same revenues referred to the corresponding quarter of 2019, determined as follows:

• 60%, for subjects with revenues related to the 2019 tax period not exceeding 5 million euros;

• 40% for subjects with revenues related to the 2019 tax period exceeding 5 million euros and up to 50 million euros;

• for enterprises established as of January 1, 2020, the relevant tax period is the tax period for the year 2021.

Eligible for the fund facilities are small and medium-sized enterprises, other than agricultural enterprises, that meet the following requirements:

• have carried out sales transactions of goods or services, including the procurement of raw materials and semi-finished products, with Ukraine, the Russian Federation and the Republic of Belarus in the past two years, amounting to at least 20 percent of total business turnover;

• have incurred an average purchase cost for raw materials and semi-finished products during the last quarter prior to May 18, 2022 increased by at least 30% compared to the average purchase cost of the corresponding period of the year 2019 or, for enterprises established since January 1, 2020, compared to the average purchase cost of the corresponding period of the year 2021;

• suffered a decrease in turnover of at least 30 percent during the quarter prior to May 18, 2022 compared to the corresponding period in 2019.

New Sabatini for investments in capital goods 4.0 and green (Pending implementation)

The decree establishes, in implementation of the provisions of Article 2, paragraph 5, of Decree-Law No. 69/2013, the requirements, conditions for access and the maximum amount of the contributions provided by the same Article 2 of Decree-Law No. 69/2013 and regulates the procedures for their granting, disbursement and control, as well as' connection with the financing for investments in machinery, plant, business assets and equipment for productive use, hardware, software and digital technologies, taking into account the changes ordered and the lines of intervention defined by the intervening legislation referred to in the provisions of law cited in the introduction.

The funds available for the granting of the facilities are fed by legal allocations, without prejudice to any allocations provided by regulatory and administrative provisions from European, national and regional sources of financing.

Eligible for the facilities are SMEs that, on the date of submission of the application:

• are duly incorporated and registered in the business register or in the fishing business register. Enterprises not resident in the Italian territory must have legal personality recognized in the State of residence resulting from registration in the corresponding business register;

• are in full and free exercise of their rights, are not in voluntary liquidation or subject to bankruptcy proceedings with liquidation purposes;

• are not among the entities that have received and, subsequently, not repaid or deposited in a blocked account aid identified as illegal or incompatible by the European Commission, without prejudice to the possibility for the company to regularize its position, even after the date of submission of the application;
• are not in a condition to be a "firm in difficulty."

Enterprises must have, on the date of submission of the application, the registered office or a local unit in Italy, as resulting from the chamber of commerce systems; for enterprises not resident in the Italian territory, the possession of the local unit in Italy must be demonstrated, under penalty of revocation of the facilities granted, when submitting the application for the grant.

The financing must be fully used for the implementation of programs concerning:

• investments in capital goods;

• 4.0 investments;

• green investments.

The programs must provide for investments that, considered individually or as a whole, have functional autonomy; financing of components or parts of machinery that do not meet the above requirement is not allowed, except for investments that integrate, with new modules, the pre-existing plant or machinery, introducing a new functionality within the company's production cycle. Programs concerning the purchase of assets that are mere replacements for existing assets are not, in any case, eligible.

The programs carried out by enterprises operating in the sectors of activity falling within the scope of the GBER regulation, in order to be eligible for the facilitation, must pursue the purposes indicated in Article 17 "Investment and employment aid to SMEs" of the same GBER regulation.

The program, considered as a whole, must be started after the date of the application for access to the subsidy, under penalty of total revocation of the subsidies. The program is considered to have started if one of the following conditions is met:

• the enterprise has entered into legally binding commitments, including the signing of contracts or the issuance of order confirmations, to order machinery, equipment, plant or any other commitment that makes the program irreversible, whichever condition occurs first;

• invoices have been issued for one or more of the goods comprising the program;

• payments, including payments on account, have been made related to one or more of the assets that make up the program.

The programs must be completed within 12 months from the date of signing the financing contract. For this purpose, the date of the last expenditure title referring to the program or, in the case of a finance lease transaction, the date of the last record of delivery of the goods shall be taken into account.

The assets covered by the program may not be alienated, transferred or diverted from their intended productive use in the three years following the date of completion of the program.

Expenditures related to the purchase, including financial leasing, of brand new capital goods, strictly functional to the implementation of the programs, are eligible for facilitations.

The facilitated assets must be for productive use and instrumental to the activity carried out by the enterprise and be located at the enterprise's production unit where the investment is made.

With the exception of fixed assets acquired through financial leasing, all facilitated assets must be capitalized and included in the balance sheet assets for at least 3 years, in accordance with applicable accounting standards.

Enterprises under the simplified accounting system exempted from the preparation of financial statements, as well as' agricultural enterprises adopting the special accounting and taxation system provided by law, for the purpose of identification of purchased goods, must submit a special DSAN made by the legal representative of the enterprise, to be kept on the records of the enterprise, prepared in the manner subsequently specified by the Ministry.

Expenditures that are paid through offsetting with receivables from suppliers are not eligible.

The grant is conditional on the adoption of a financing resolution in favor of the SME by a financing entity.

The financing, the contract for which must be signed after the date of submission of the grant application, must have the following characteristics:

• be resolved to cover investment programs;

• have a maximum duration, including a pre-amortization or pre-lease period of not more than 12 months, of five years starting from the date the financing contract is signed or, in the case of financial leasing, starting from the date of delivery of the asset.

Where the supply under financial lease relates to a plurality of assets, the above maximum term shall run from the date of delivery of the last asset;

• be deliberated and contracted for a value of no less than €20,000 and no more than €4,000,000, even if split into several purchase initiatives, for each beneficiary enterprise, without prejudice to the provisions for programs in the fisheries and aquaculture sector. In the case of successive requests for facilitation submitted by the same enterprise, for the purposes of verifying compliance with the aforementioned limit of € 4,000,000, the total amount of financing already eligible for facilitation referred to the beneficiary enterprise, for which the terms of duration have not yet expired as communicated by the financing entity when entering into the relevant contracts, is relevant;

• be disbursed in one lump sum to the beneficiary enterprise, within 30 days from the date of stipulation of the bank financing contract or, in the case of financial leasing, be disbursed to the supplier within thirty days from the date of delivery of the asset or the date of testing, if later.

The financing covers up to 100% of the programs, is granted, until the date of the exhaustion of available resources.

In the case of financial leasing, the leasing company must exercise in advance, at the time the contract is signed, the option to purchase provided for in the contract, the effects of which take effect from the end of the financial lease, subject to the fulfillment of all contractual obligations. This commitment may be made by means of a contractual appendix that forms an integral part of the contract itself.

Against the financing, a subsidy shall be granted, within the limits of the intensities provided for in the cumulability regulations, in the form of a grant for equipment, equal to the total amount of interest calculated, by agreement, on a five-year loan of an amount equivalent to the same loan, at an annual interest rate equal to:

• 2.75 percent for investment in capital goods;

• to 3.575 percent for 4.0 and green investments.

The granting of financing may be assisted by the guarantee of the Guarantee Fund, within the limits and conditions of the Fund's operation.

Facilities are granted within the maximum allowable aid intensity in relation to eligible programs, in accordance with the provisions of the following applicable block exemption regulations:

• ABER Regulation, Articles 14 and 17, for the agricultural products production sector, with a maximum concessional intensity of 50 percent in the least developed regions, as defined in Article 1(37) of the aforementioned ABER Regulation, and 40 percent in the remaining regions;

• FIBER Regulation, Articles 26, 28, 31, 41, 42, for the sector of production, processing and marketing of fishery and aquaculture products, with maximum facilitative intensity of 50 percent;

• GBER regulation, Article 17, for sectors not covered by (a) and (b) above, with maximum concessional intensity of 10 percent for medium-sized enterprises and 20 percent for small enterprises.

Facilities may be cumulated with other state aid, in relation to the same eligible costs, wholly or partially overlapping, only if such cumulation does not lead to exceeding the highest aid intensity or aid amount applicable to the aid in question under the applicable exemption regulations depending on the activity carried out.

Terms and conditions will be defined by a subsequent order of the Director General for Business Incentives of the Ministry, published on the Ministry's website.

Within 30 days of receipt of the list of funding resolved by each financing entity and the documentation sent by the enterprise when submitting the application for access to the facilities, without prejudice to the possibility of requesting additions or clarifications, the Ministry adopts the granting measure indicating the amount of eligible investments and the facilities that can be granted, as well as' the obligations and commitments to be borne by the beneficiary enterprise.

The grant shall be disbursed in one lump sum or in several annual installments, based on the procedures defined in the measure of the director general for business incentives.