Super and Hyper Depreciation: incentives for those who buy hardware and software

Perhaps not everyone knows this, but the 2017 Italian Budget Law contains important incentives for companies intending to purchase Hardware and Software. Let's be clear from the start: not all HW and SW qualify for the incentive. Only certain machinery (a long list of types of machinery) and the SW that makes it work, communicate and interact.

There is a national plan called Industria 4.0 and, within this plan, there is a tax relief called Super and Hyper Depreciation, which allows you to save money when filing your tax return. How much can you save?

Super Depreciation 140%

It consists of an off-book deduction of 40% for investments in new capital goods (plants and machinery) made by companies or freelance professionals, which brings the maximum allowed deduction to 140% by reducing the taxable base on which taxes are calculated.

Hyper Depreciation 250%

The 2017 Stability Law offers the opportunity to apply a 150% increase on the acquisition cost of new capital goods (the list of eligible goods is given in Annex A). Essentially, the aim is to encourage and incentivise investments made to build and/or transform smart, interconnected machines.
If you decide to purchase an asset that falls within the Industria 4.0 plan and SW is installed on that asset, that software will also benefit from the Hyper Depreciation.

The subject is obscure and complex and it is not our intention to delve into the economic and tax explanation of the two subsidised forms of depreciation: what matters is knowing they exist!

If you are thinking of purchasing a new machine, equipped with a PLC, on which you will install software... consult your accountant, he/she will be able to advise you and, most likely, you will get your new HW and SW plus an unexpected tax break.

We also recommend consulting Annexes A (tangible assets = Machinery) and B (intangible assets = software, systems and system integration, platforms and applications) of the 2017 Budget Law, which list the machinery and SW covered by the incentive: if you think you may qualify, take advantage of it and renew your company! Open Gate can give you a hand by developing the SW and also by putting you in touch with a tax consultant of proven experience, who will guide you through the bureaucratic jungle of incentives.