Art. n. 4 of the Growth Decree introduced a novelty of great interest for companies, that is an alternative more quicker and easier discipline, to opt for the patent box regime.
The 2015 Stability Law introduced the well-known optional tax regime (called “patent box”) that allows tax exemption from corporate tax incomes arising from qualified intangible assets.
In a nutshell, companies can opt for the exclusion from the tax base of 50% of incomes deriving from the use of certain assets (for example software covered by copyright, patents, models, processes and formulas) as well as capital gains deriving from their sale if 90% of their amount is reinvested.
The previous regulations provide that, if the intangible assets had been directly exploited by the company the latter should determine the share of the eligible income, in advance, through a specific agreement with the Revenue Agency in the forms provided for the international rulings.
This procedure could last over time with a waste of resources both for companies and for the Tax Authority itself.
The Legislator of 2019, as put of increasing trust and collaboration between the Tax Authorities and tax payers, along the lines of the provisions on the documentation to be prepared for the purpose of transfer pricing, and in order to make the option for the patent box easier, established that companies as an alternative to the ruling referred to above, can opt for an independent assessment on the income components referable to the eligible intangible assets.
In this case, the companies in the annual income tax return where election for the patent box tax regime is exercised, must indicate that they have prepared all the information necessary for determining the eligible income in a specific documentation which must be presented to the Revenue Agency, if requested.
The content of this documentation was recently outlined in details by the provision n. 658445/2019 of the director of the Revenue Agency.
In a nutshell, the company must prepare documentation structured as follows:
- Section A, where data relating to intangible assets the structure of the company and its activity are indicated;
- Section B surely the most significant where the share of the eligible income is calculated with a detailed indication of the method and the data used for this purpose.
Moreover, it is expressly provided that in order not to lapse from the facilitated regime the documentation must be suitable in the sense that it must provide “all the data and the elements necessary to find the correct determination of the eligible income”. The Tax Authority may well use different methods or parameters to determine the share of eligible income, but this is not an impediment to the judgment of suitability of the documentation, as is not the presence of omissions or partial errors which do not affect the assessment by Tax Agency officers.
In addition to the considerable advantage for companies of bypassing the consultation phase with the Tax Authorities the legislator likewise what happens in case of transfer prices issues, has provided that the company that adopts suitable documentation and communicates it in the Tax Returns, is not subject to fines for unfaithful declaration, even in case the Tax Authority assesses the amount of the eligible income.
In light of the above the novelty introduced by the Growth Decree undoubtedly appears to be great news for companies which from now on will be able to easily benefit from the patent box favor regime, against mere preparation of suitable documentation.
Author: Paolo Viscontii
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