Patent Box
Art. 6, Decree Law No. 146 of October 21, 2021, converted, with amendments, by Law No. 215 of December 17, 2021, as subsequently amended by Law No. 30 of December 30, 2021, and updated by Revenue Agency Circular No. 5 of February 24, 2023, and the 2025 Budget Law.
December 2021, No. 234, and updated by Revenue Agency Circular No. 5 of February 24, 2023, and the 2025 Budget Law.
Purpose
Encourage investment in technological innovation, research, and development through a favorable tax regime.
The incentive generates a significant reduction in tax on income derived from the use of intangible assets, such as patents, designs, and models.
Beneficiaries
All companies resident in Italy, including permanent establishments of non-resident entities, regardless of their legal form, sector, size, or tax regime, that carry out research and development activities, including through contracts with third-party companies, universities, or research institutions, are eligible for the New Patent Box Regime.
Eligible intangible assets
The intangible assets eligible for relief are:
a) copyrighted software;
b) industrial patents, including patents for inventions, biotechnological inventions and related supplementary protection certificates, utility model patents, as well as patents and certificates for plant varieties and topographies of semiconductor products;
c) designs and models;
d) two or more intangible assets among those indicated in points a) to c) above, linked together by a complementary relationship, such that the creation of a product or family of products, or a process or group of processes, is dependent on the joint use of these assets, which are used directly or indirectly by the beneficiary in the course of their business activities. Expenses relating to trademarks and know-how are excluded.
Eligible expenses
Eligible activities that generate costs for which the Patent Box can be applied include:
- activities that can be classified as industrial research and experimental development;
- activities that can be classified as technological innovation;
- activities that can be classified as design and aesthetic conception;
- legal protection of intangible asset rights.
The following costs strictly related to the intangible asset in which the company has invested are eligible for relief:
- Personnel costs: expenses relating to employees or self-employed personnel engaged in the relevant activities, including salaries, social security and welfare contributions, severance pay, and travel allowances.
- Depreciation and lease payments: depreciation charges, finance and operating lease payments relating to capital goods used in relevant activities.
- Consultancy and equivalent services expenses: costs for specialist consultancy services closely related to the relevant activities.
- Materials and supplies: expenses for materials, supplies, and other products used in relevant activities.
- Legal protection costs: expenses related to the maintenance, renewal, protection, and defense of rights to intangible assets, including costs for the prevention of counterfeiting and the management of disputes.
Facilitation
The tax relief allows companies to apply a 110% surcharge on research and development costs relating to protected intangible assets, thereby reducing the tax burden by 30.69% of the costs incurred. Questo risparmio fiscale si ottiene grazie alla combinazione della maggiorazione del 110% e delle aliquote
IRES (24%) and IRAP (3.9%).
Following the latest reformulation of the incentive, starting in 2021, the Patent Box introduces a Reward Mechanism that allows companies that obtain an industrial property right relating to intangible assets to deduct, at an increased rate, the costs incurred for research and development activities during the eight tax periods prior to obtaining the aforementioned property right.
Calculation example
Based on a project estimate of €100,000.00 for research and development, thanks to the 110% increase, the deductible expense is increased to €110,000.00.
Total tax savings:
The tax savings are calculated as the sum of the savings resulting from IRES and IRAP.
- IRES savings: €110,000.00 * 24% = €26,400.00
- IRAP savings: €110,000.00 * 3.9% = €4,290.00
Total tax savings:
The total tax savings are given by the sum of the IRES and IRAP savings:
- €26,400.00 (IRES) + €4,290.00 (IRAP) = €30,690.00
Percentage tax savings compared to the original cost:
- Percentage tax savings compared to the original cost:
Durata del programma
The option is valid for five tax periods and is irrevocable and renewable.
Cumulability
La cumulabilità tra il Patent Box e altre sovvenzioni, come il credito d’imposta R&S, prevede che i costi sui quali siapplica la maggiorazione del 110% siano considerati al netto di eventuali contributi ricevuti.
Documentation
In order to benefit from the tax relief, it is essential to prepare appropriate documentation demonstrating the link between the costs incurred and the development of intangible assets. This documentation must be signed by the legal representative of the company or by a delegate using an electronic signature with a time stamp, to be affixed by the date of submission of the tax return.
The company must indicate its participation in the scheme in its tax return (section OP).
Enjoyment of the benefit
The first tax period in which it is possible to take advantage of the benefit is that of actual use, which could also occur in a tax period subsequent to that in which the industrial property right was obtained.
WITH REGARD TO
Patents: the relevant moment is when the exclusive right is obtained and the patent is actually used in economic activity.
c) “Legally protected” designs and models: a distinction must be made between:
a) registered designs;
b) unregistered Community designs that meet the requirements for registration, which are protected for a period of three years from the date on which the design was first disclosed to the public in the Community (as referred to in Article 11 of Council Regulation (EC) No. 6/2002 of December 12, 2001, on Community designs);
c) industrial designs that are creative and have artistic value (pursuant to Article 2, paragraph 1, no. 10, of Law no. 633 of April 22, 1941, concerning copyright and other rights related to its exercise).
In order to enjoy the ordinary benefit in cases b) and c), proof of the existence of the asset may be provided by means of a substitute declaration.
As regards the use of the reward mechanism with reference to unregistered designs and models, it is possible to recover the costs previously incurred only from the moment the industrial property right is obtained through registration.
Software: with regard to the standard tax relief, the relevant moment may be represented by a substitute declaration certifying the existence of the software; while with regard to the software bonus tax relief, the tax relief shall apply from the tax period in progress on the date of registration with the SIAE (Italian Society of Authors and Publishers), provided that the software is actually used.
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