According to the information provided by the Italian government, the patent box regime is a bonus offered to those who want to benefit from various tax grants and deductions. This program is dedicated to both companies and individual entrepreneurs, plus other categories of entities. In the following lines, you can find information about the patent box regime in Italy, specifying that our Italian company formation agents can help you with information in this direction. Moreover, our local agents can help you with opening a company in Italy and the procedures involved.
Table of Contents
Who qualifies for the advantages of the patent box regime in Italy?
Those who qualify for the patent box regime can benefit from the reduction or even the elimination of corporate tax in Italy. For example, incomes generated by direct use of qualified intangible assets can be taxed with only 50% of the corporate income tax in Italy. This tax can be eliminated in the case of incomes resulting from the exploitation of intellectual property licensing like royalties.
Application for patent box regime in Italy
The patent box regime in Italy is considered a tax bonus for certain categories of businessmen. Here’s how to get this bonus:
- An advance tax ruling from the Tax Agency in Italy must be obtained. The quantity of benefited revenue resulting from the direct use of qualified intangible assets of an entity registered in Italy is thus determined.
- Having operations in the research and development sector in Italy and a direct connection with intellectual property is another way to access the patent box regime.
What are the benefits brought by the patent box regime in Italy?
The patent box regime in Italy provides and supports the promotion of investments in research and development of intangible assets. This category includes patents, protected copyrights, and protected intellectual property, among others. Company owners, entities carrying our operations in Italy, and even non-resident taxpayers can qualify and benefit from the patent box regime in Italy.
About taxation using the patent box regime in Italy
The 2022 Budget Law in Italy made changes regarding the patent box regime in Italy, as follows:
- Taxpayers in Italy can benefit from partially exempted income resulting from qualifying intangible assets from corporate income tax, normally levied at 24%, and local tax, usually levied at 3.9%.
- One can benefit from the patent box regime in Italy for 5 years.
- A 110% extra deduction is applicable for research and development expenses linked to particular types of intangible assets in Italy.
- In addition to the benefits brought by the patent box regime in Italy, taxpayers can also enjoy tax credits for R&D activities.
- The patent box office advantages apply both for direct use of intangible assets and indirect use connected to the company operations.
Patent box regime can be a great option for foreigners interested in company incorporation in Italy. Get in touch with us if you want to start a company in Italy.
Some information about taxes in Italy
The patent box regime in Italy is an advantage for certain categories of entrepreneurs in this country. Here is other information about taxation in Italy:
- 24% is corporate income tax in Italy. It was reduced from 27.5%.
- 3.9% is the regional production tax.
- The standard VAT in Italy is 22%, followed by reduced rates of 10%, 5% and 4% respectively.
- In Italy, there is a substitute tax, based on progressive rates ranging from 12% to 16%.
If you want to set up a business in Italy, you can opt for our services. You can also get in touch with our accountants in Italy and find out what services are needed. For example, payroll in Italy is mandatory. Contact us for more information and support for company formation in Italy.