Transition 4.0 tax credit 2022-2025: all the news

In this article we have collected the main questions and answers on Transition 4.0, or the tax credit valid for the three-year period 2023-2025 in Italy.

Transition 4.0 2022 confirms, and extends, the tax relief model started in 2017 for interconnected innovative assets, defined as "Industry 4.0" assets.

The substantial difference of the 2022 subsidy, compared to the Industry 4.0 subsidy, is that, starting from 2020, the over-depreciation becomes a tax credit, the tax benefit is calculated directly as a percentage of the cost of acquiring the asset, for example a machine for the production.

In 2022, compared to 2021, the benefits for those who buy machinery are lower (worsening already foreseen by the 2021 budget law) and will be even more so in the three-year period 2023-2025 (as decreed by the budget law 2022), this is because both the percentages of the cost of the asset, which goes to tax credit, and the investment ceiling for a single subsidized time period are gradually decreased.

The article was written for those who want to sell and buy industrial machinery with the aim of enjoying the advantages provided by the national Transition 4.0 plan for the three-year period 2022-2025.

At the end of the article, the main technical tips for industrial machinery buyers and manufacturers are listed.

If you like the article, you can link it on your site, quoting the source; Please avoid copying it, not only because it is prohibited by law but also because it has already been copied many times and Google, recognizing the copied pages, would not rank your site well.

If you are looking for an article that summarizes the fundamental points of the facility from a tax point of view (to which subjects it applies, what is meant by the moment of making the investment, how the assets can be purchased, etc.), you will find it HERE.

In our blog you will also find an analysis of the activities we carried out on Industry 4.0 in the period 2017/2018 and an article that tells some "Myths, legends and errors" about the appraisals and certifications for Industry 4.0.

In this other article of ours you will find all the information relating to the birth of the Industry 4.0 plan of 2017 and the rules that still apply to assets whose investment began in the years 2017-2019 (Enterprise 4.0 and Industry 4.0 plans), assets that can also be connected in subsequent years and enjoy hyper-amortization according to the acquisition time rules.

If necessary, contact us if you have goods purchased from 2017 to 2020 and for which no facilitation has ever been requested.

I suggest you also read this interesting article "How to choose the expert for Industry / Transition 4.0" and avoid mistakes that could be very expensive.

Content updated with Italian Agenzia delle Entrate Circular 4E of 30/03/2017, Circular n. 9 / E / 2021, Budget Law 2021 n.178 / 2020 amended by Law n.234 / 2021 Art.1 paragraph 44, Thousand Proroghe Decree of 24 February 2022

1. Transition 4.0 2022: what are the main changes compared to Transition 2021?

The 2022 budget law (Law no.234 of 30 December 2021, art.1, paragraph 44) renewed the Transition 4.0 incentives for the purchase of interconnected capital goods by companies, maintaining the type of enjoyment of the facility, i.e. the tax credit.

Investments in new tangible and intangible assets that are instrumental to business operations can be facilitated.

The percentages of the cost of the asset, which goes to tax credit, and the investment ceiling for the concessionary period are summarized in the following table:

In any case, for investments exceeding 2.5 million euros, there is the possibility of enjoying a tax credit, but to a lesser extent than the percentages shown in the table in the second column.

Also in 2022-2025 it will be possible to use the credit immediately in the year of the investment and interconnection of the machine, without waiting until the following year.

The tax credit is not taxed for IRPEF / IRES / IRAP purposes. It can be combined with other concessions (for example for the South) provided that the accumulation does not lead to the total cost incurred being exceeded

Some mandatory bureaucratic requirements are to be considered:

• companies that enjoy the 2022 concessions must notify the Ministry of Economic Development ;
• the sworn appraisal (or certification from an institution) is mandatory for assets with a value greater than or equal to 300.000 euros;
• invoices and other documents relating to the acquisition of subsidized assets must contain express reference to the provisions of paragraphs 1054 to 1058 - ter of article 1 of Law 178 of December 30, 2020, as amended by law 234/2021 Art .1, paragraph 44

What wording should be included on invoices for goods purchased from January 2022 onwards?

As written above, the invoices for the sale of goods must bear the phrase "good / service that can be facilitated pursuant to paragraphs 1054 to 1058 - ter of article 1 of Law 178 of December 30, 2020, as amended by law 234/2021 Art. .1, paragraph 44 "

What should I do if the purchase invoices do not show the legal references?

As described above, the invoices of the goods purchased, and ordered 2021 and later, therefore subject to Transition 4.0 (tax credit), must carry the sentence that the goods are eligible for tax purposes according to art. 1 of law 178 of 2020.

In fact, the lack of references is very serious becausel paragraph 1062, of article 1 of law no. 178 of 2020, states that "For
the purposes of subsequent controls, the subjects who avail themselves of the tax credit are
required to keep, under penalty of revocation of the benefit, the appropriate documentation
to demonstrate the actual incurred and correct determination of the eligible costs.
To this end, invoices and other documents relating to the acquisition of subsidized assets
must contain the express reference to the provisions of paragraphs 1054 to 1058 (now ter from 2022) .. "

Since there have been appeals to the Revenue Agency, because on many invoices the references are missing, in particular on the down payments obviously because the law was not yet in place, the Agency on October 5, 2020 made available a couple of answers to allow the regularisation of the invoices.

The answers are answer n. 438 (for the analogous problem of Sabbatini) e n. 439, of October 5, 2020 downloadable by clicking here

In practice, simplifying:

• if the invoices to be regularized are paper, it is sufficient to write over the sentence indelibly with the references of the law, in pen or with a stamp (on each down payment and balance invoice)

or if the invoice is electronic there are 2 possible alternatives:

• print the invoice and write the sentence as above
• create an electronic integration of the invoice to be combined with the original and kept together with it in the manner indicated, albeit in terms of reverse charge, in circular no. 14 / E of 2019.

2. How is the 2022 tax credit for machinery calculated?

The 2022 Budget Law defined new differentiated rates for the tax credit for investment in machinery, which began on January 1, 2022.

They are:

• TAX CREDIT of 40% of the value of the investment asset up to € 2.5 million;
• TAX CREDIT of 20% of the value of the asset for investments over 2.5 million euros up to 10 million euros;
• TAX CREDIT of 10% of the value of the asset for investments over 10 million euros up to 20 million euros.

The tax credit is not applied to the portion of total investments exceeding the limit of 20 million euros.

The rate is applied, in incremental brackets, to the total investments and not to the value of the individual asset purchased.

The tax credit that the company that buys an interconnected machine can enjoy is therefore 40% of the taxable value of the machine, for example if the machine costs 100,000.00 euros plus VAT, the tax credit that can be enjoyed in 3 years is 40,000 euros.

This concession remains the same for goods delivered by 30/6/2023 with a deposit of at least 20% paid by December 31, 2022.

This credit can be combined with the South credit.

3. What are the new 2022 tax credit rates for software?

To incentivize new private investments in technologies, the 2022 budget law defined the rate for the tax credit for investments in intangible assets.

From November 16, 2020 until December 31, 2023, or until 30 June 2024, provided that by December 31, 2023 the relative order has been accepted by the vendor and that down payments amounting to at least 20 per cent of the acquisition cost have been made, the following applies

• TAX CREDIT of 20% of the value of the intangible asset for investments up to € 1,000,000 per year .

4. How to use the tax credit?

The tax credit is used as compensation on F24 with the use of the 6 NEW tax codes established with the resolution of AdE no. 3 / E of 2021 to use as compensation the bonuses provided for by the 2020 Budget law and the 2021 and 2022 Budget law.

The subsidy will be enjoyed by the company in 3 annual installments (there were 5 in 2020) of the same amount from starting from the year of interconnection of the assets.

5. What happens for the investments decided between November 16, 2020 and December 31, 2021?

For investments for which a 20% deposit has already been given by 31 December 2021, or which have been acquired in 2021, but not yet interconnected, DO NOT CHANGE ANYTHING, the 2021 budget law (Law 178/2020) applies with 50% tax credit.

6. What happens to the investments decided in 2019?

For investments for which a 20% deposit has already been given by 31 December 2019, or which have been acquired in 2019, but not yet interconnected, DO NOT CHANGE ANYTHING, the 2019 budget law applies (law 30 December 2018, no. . 145) with 250% over-depreciation.

7. What happens to the investments decided in 2017 and 2018?

For investments for which a 20% deposit has already been given by 31 December 2018, or which have been acquired in 2017 or 2018, but not yet interconnected, DO NOT CHANGE ANYTHING, the 2018 budget law applies (law 11 December 2016 , no. 232, as amended by law no. 205 of 27 December 2017).

Then see our article on hyper-depreciation 2019.

8. What is the timeframe to take advantage of the 2022-2025 tax credit?

The times are those expressed in the table above.

9. Who can access the 2022 “Transition 4.0” tax credit?

All businesses resident in the territory of the State can access the 2022-25 tax credit, regardless of their legal form, economic sector, size and tax regime.

Since the entry into force of the decree called "dignità" of July 2018, the purchased goods must be operational within the national territory.

Companies subject to disqualification sanctions pursuant to article 9, paragraph 2, of legislative decree 8 June 2001, n. 231. For companies admitted to the tax credit, the use of the benefit due is in any case subject to the condition of compliance with the regulations on safety in the workplace applicable in each sector and the correct fulfillment of the obligations to pay social security and welfare contributions in favor of workers.

So pay close attention to compliance with the safety and health requirements of the workers of your company (Legislative Decree 81/08).

10. What are the capital goods that are included in the tax credit?

The tax credit is applied to NEW goods, instrumental to business operations, (also purchased under leasing) of the following types:

• tangible assets (machinery, equipment, etc.) listed in Annex A of the law;
• intangible assets (licenses, software, systems) listed in Annex B of the law, essential to make the tangible assets in Annex A work.

Annex A (tangible assets) lists 3 CATEGORIES of assets:

• A1: capital goods with operation controlled by computerized systems and / or managed by appropriate sensors and drives (for example machines for production, packaging, processing, machine tools, etc.);
• A2: systems for quality and sustainability assurance (e.g. sensor systems, product traceability systems, etc.);
• A3: devices for man-machine interaction and for the improvement of ergonomics and workplace safety in 4.0 logic (for example safety systems to prevent accidents, reduce errors and increase efficiency).

Annex B (intangible assets) , on the other hand, as depreciable assets envisages programs and applications purchased by companies that already invest in tangible assets in the logic of industry 4.0 (for example software, systems and system integration, platforms and applications).

Attached Original B, the 2018 budget law, added the following assets:

• supply chain management systems aimed at drop shipping in e-commerce;
• software and digital services for immersive, interactive and participatory use, 3D reconstructions, augmented reality;
• software, platforms and applications for the management and coordination of logistics with high integration characteristics of service activities.

11. What are the characteristics that machinery (A1) must have in order to benefit from the subsidy?

The purchased goods must be new and instrumental to the business operation, then they must have some mandatory technical characteristics and some additional ones.

The reason for these constraints is that we want to push the purchase of advanced machines interconnected to the factory system and with other components of the processing cycle, that is really an industry 4.0 project and not a simple purchase of new machines for traditional production.

In fact, the objective of the national plan is to bring Italian production to very high levels of automation and interconnection, not only within the factory but also between companies that work together, for example between the factory and logistics.

12. What are the mandatory characteristics of the machinery to take advantage of the subsidy?

The machines listed A1 must have all the following 5 characteristics:

1. control by means of CNC and / or PLC (see note 1 below);
2. interconnection to factory computer systems;
3. integration with the logistic system of the factory and / or other machines;
4. simple and intuitive man-machine interface;
5. compliance with the latest safety standards.

In the final part of this article you will find examples of industrial components to meet these requirements.

Note 1: Circular 4E of 03/30/2017 clarified that the characteristic of control by means of CNC (Computer Numerical Control) and / or PLC (Programmable Logic Controller) is to be considered fully accepted even when the machine / plant has solutions equivalent control systems, i.e. from a PC programmable logic device, microprocessor or equivalent that uses a standardized or customized language, or more complex ones, with or without a centralized controller, which combine multiple PLCs or CNCs (for example: control solutions for cells / FMS or systems equipped with DCS - Distributed Control System solution).

13. What are the additional features of the machinery to take advantage of the subsidy?

The machine must have at least 2 characteristics among these 3 listed:

1. remote maintenance and / or remote diagnosis and / or remote control systems;
2. continuous monitoring of working conditions and process parameters by means of appropriate sets of sensors and adaptation to process drifts;
3. characteristics of integration between physical machine and / or plant with modeling and / or simulation of its own behavior in carrying out the process (cyber-physical system) (see note 2 below).

In the final part of this article you will find examples of industrial components to meet these requirements.

Note 2: Circular 4E of 30/03/2017 clarified that reference is made to the concept of the so-called digital twin, i.e. the availability of a virtual or digital model of the behavior of the physical machine or plant, developed in order to analyze its behavior also, but not exclusively, with predictive and optimization purposes of the behavior of the process itself and of the parameters that characterize it. Both on-machine and off-line resident models or simulations are included, such as models generated using machine learning techniques.

14. What does an interconnected machine mean?

Circular 4E of 30/03/2017 clarified that the characteristic of the interconnection to the factory computer systems with remote loading of instructions and / or part programs is satisfied if:

• the asset exchanges information with internal systems (e.g. management system, planning systems, product design and development systems, monitoring, even remotely, and control, other machines in the plant, etc.) by means of a connection based on documented, publicly available and internationally recognized specifications (examples: TCP-IP, HTTP, MQTT, etc.);
• moreover, the asset must be uniquely identified, in order to recognize the origin of the information, through the use of internationally recognized addressing standards (eg: IP address).

The word factory must be understood as a physical environment where value is created through the transformation of raw materials or semi-finished products and / or the creation of products; by instructions we can also mean indications, which from the factory information system are sent to the machine, linked to the planning, scheduling or control of production progress, without necessarily having the characteristics of implementation or start-up of the machine.

In practice, the machine must be equipped with a system connected to the existing company network and to some devices (for example an IPC system such as a Simatic industrial tablet PC, Scalance W network switch, field PC, NETWORK SERVER).

15. What must the company do to benefit from the 2022 facility?

The company must purchase the assets, whether tangible or intangible, brand new, from January 1, 2022 until December 31, 2025,or it must issue the order and pay a deposit of more than 20% by December 31, 2025 and put the assets into operation by June 30, 2026 .

The company, for assets worth less than € 300,000, must then acquire a certificate showing that the asset:

• possess all the binding technical characteristics required by law;
• is interconnected to the production management system or to the supply network.

16. How to apply for the tax credit?

ATTENTION!!!

Compared to the rules of 2017/2018, from 2020 there is a new mandatory fulfillment.

The companies that make use of these measures notify the Ministry of Economic Development (MISE). With a specific directorial decree of the Ministry of Economic Development, the model, content, methods and terms for sending the communication in relation to each eligible tax period are established.

The communication templates were only made available on October 20, 2021, DOWNLOAD HERE.

The subsidy will then be enjoyed by the company as a tax credit that can be used, only in compensation with the mod. F24, in 3 annual installments (there were 5 in 2020) of the same amount starting from the year of interconnection of the assets.

17. Who has to make the certificate for the subsidy?

For goods with a cost of up to € 300,000, a substitutive declaration of a notary deed by the legal representative of the company is sufficient.

For goods costing more than 300,000 euros, you need a sworn technical report issued by an engineer or industrial expert, enrolled in the professional register, or a certificate of conformity issued by an accredited certification body (definition by law, it is not clear whether it is a Notified Body) which certifies the interconnection of the asset.

The attestation is made for the single asset, a single attestation is not valid for all the assets purchased during the year, even if a single appraisal can describe and include many assets.

18. When must the certificate for subsidy be made?

The attestation, or the appraisal, must be made within the tax period in which the asset is interconnected with the factory, even with an interconnection subsequent to the time the asset enters into operation.

The tax credit can only be used from the moment of interconnection.

19. What happens with leased machines?

The relief is also applicable to goods acquired by leasing, the cost to be considered, for the calculation of the tax credit, is that of acquisition of the goods by the leasing company.

Tips for those who buy and for those who sell machinery

If you are a buyer of machines subject to the tax credit facility ...

• check that the machine / instrumental good you intend to purchase falls within the types included in the list in Annex A of the law (Official Gazette) ;
• check that the machine, listed A1, has the mandatory characteristics, listed below for convenience:
  • control by means of CNC and / or PLC;
  • interconnection to factory computer systems;
  • integration with the logistic system of the factory and / or other machines;
  • simple and intuitive man-machine interface;
  • compliance with the latest safety standards;
• ensured, and had it declared by the manufacturer in the order confirmation, that the machine, in list A1, has at least 2 of the following characteristics:
  • remote maintenance and / or remote diagnosis and / or remote control systems;
  • systems for continuous process monitoring;
  • characteristics of integration between physical machine and / or plant with the modeling and / or simulation of one's own behavior in carrying out the process (cyber-physical system).

The exact technical details can be found here .

Remember that, without the declaration / attestation of interconnection to the factory - within the fiscal year in which the machine is put into operation - you will NOT be able to enjoy the tax credit, even if the machine has all the characteristics of the law.

It also reminds you that all documents relating to the acquisition of the asset (invoices, orders, contracts, leases, transport documents, etc.) must bear the wording that it is a subsidized asset according to paragraphs 1054 to 1058 - ter of the Article 1 of Law 178 of 30 December 2020 as amended by Law 234/2021 Article 1, paragraph 43.

What can we at Quadra Srl do to help you?

In Quadra we have been dealing, since 1995, with providing advice and training on the safety of industrial machines and plants.

Also thanks to our partners in the world of automation (Schmersal Italia, Omron, KUKA Roboter, ABB, Tritecnica, Access, Leuze, Rockwell, SMC) we are able to provide our customers with qualified technical assistance in the design of the machines and in the choice of components.

The appointment in 2016 of our Technical Manager, Eng. Ernesto Cappelletti, Federmacchine Representative in the UNI field, in relation to the mechanical regulatory aspects, allows us to follow the standardization works from their very beginning.

Quadra is also a Research and Technology Transfer Center, registered in the Questio System of the Lombardy Region.

Since 2016, we have joined the National Intelligent Factory Technology Cluster (CFI) which aims to make the National Industry 4.0 Plan of the Ministry of Economic Development operational, through the presentation of the most advanced 4.0 technologies and their possible applications.

Quadra is also registered on the OPEN INNOVATION platform of the Lombardy Region.

To help you apply the industry 4.0 program correctly, we can provide you with our technical advice.

During the selection and purchase phase of the machines, we check the specifications and offers of the manufacturers to ensure that the machines meet all the technical conditions required by law with the aim of enjoying the 2022 concessions.

We can also assist you by preparing a technical report for the legal representative's declaration of legal requirements.

Finally , our technical director, Eng. Ernesto Cappelletti, Innovation Manager (enrolled in the MISE Innovation Manager list) can issue the mandatory technical appraisal for goods over € 300,000 in cost. Important: the appraisal activity is covered by LLOYD insurance with a ceiling of 10 million euros.

In 2017, 2018 and 2019, 2020, 2021 we have assisted many companies in this path, for a total value of hyper-amortized assets exceeding 178 million euros.

Pay attention that, even in the event of a declaration by the legal representative, a technical report could help you demonstrate the existence of the installation requirements required by law, especially after many years in the event of a dispute by the Revenue Agency.

Liability for false declarations is criminal, check the presence of the technical characteristics carefully before declaring things that are not known.

Fill out the form at the top of the page if you want to receive a quote for the sworn appraisal required for assets over 300,000 euros.

If you are a manufacturer or seller of machines that can benefit from the tax credit ...

• check that the machine / instrumental good you produce falls within the types included in the list in Annex A of the law (Official Gazette) ;
• make sure your machine, listed A1, has the 5 mandatory characteristics or make sure that it has:
  • control by means of CNC and / or PLC;
  • interconnection to factory computer systems;
  • integration with the logistic system of the factory and / or other machines;
  • simple and intuitive man-machine interface;
  • compliance with the latest safety standards;
• checks, and declares in the advertisement of the machine, in list A1, and in the order confirmation, the existence of at least 2 of the following characteristics:
  • remote maintenance and / or remote diagnosis and / or remote control systems;
  • systems for continuous process monitoring;
  • characteristics of integration between physical machine and / or plant with the modeling and / or simulation of one's own behavior in carrying out the process (cyber-physical system).

The exact technical details can be found here .

It is important that your salespeople know about these benefits and tell customers about them.

Verify that your promotional material contains and clarifies this information.

To this end, we can help you by organizing customized training for your vendors based on the characteristics of your machines.

Establish a collaboration with those who will be able to help your customer with the certificate of conformity of the machine, and for this Quadra can help you.

Remind your commercial and administrative office that all documents relating to the sale of the asset (invoices, orders, contracts, leases, transport documents, etc.) must bear the wording that they are subsidized goods according to law 160 of 27 December 2019, art 1 paragraphs from 184 to 194

Technically, how to design an INDUSTRY 4.0 machine?

Let's see an example.

If you produce packaging and wrapping machines, you will find that this type is included in Annex A of the law; at this point it will only be necessary to satisfy the other technical requirements.

Particular industrial components can be used to meet the mandatory requirements .

For the control requirement via PLC you can choose a Siemens controller from the SIMATIC S7-1200 or SIMATIC S7-1500 family .

To meet the process control requirement you can use a Sirius 3UG and 3RR monitoring device also from Siemens.

For interconnection to factory IT systems, you can choose a Siemens Industrial Ethernet Scalance switch.

To make sure your machine is safe according to the highest regulatory standards, you can request our specialist advice and you will also find lots of information on our blog.

An electronic key recognition system is that of Euchner EKS sold in Italy by Tritecnica SpA .

EKS is a device for reading RFID electronic keys designed for the recognition of an operator and suitable for all applications that require electronic identification, from accessing a PC to enabling a control system to a processing change in a plant.

The operator is recognized by inserting the electronic key, equipped with an RFID transponder, in the appropriate seat. The special shape of the case allows you to leave the key inserted during work operations. The extraction of the key is communicated to the control system, which can thus disable access or record the end of the operator's presence and the reading unit can communicate with the machine control system via the RS232, RS422, USB interface. Profibus DP, Ethernet TCP / IP or ProfiNet

The interconnection and integration requirements with the factory instead depend on the IT context of where the machine will be installed.

These requirements can be satisfied by the user company with the creation of a network connected with the existing company network and with some devices (for example an IPC system such as a Simatic industrial tablet PC, network switch Scalance W, field PC, NETWORK SERVER ).

Special industrial components can be used to meet the additional requirements.

For example, for remote diagnosis and teleservice, specific factory equipment interfaced with a PROFINET network of the machine will be required (for example IPC plus Scalance Network switch plus field PC plus network server).

For remote control we recommend, from our partner SMC, the two- port EX600 serial interface unit compatible with the EtherNet / IP ™ fieldbus system.

The two ports allow for three connection topologies, the QuickConnect ™ function improves power up and network connection times, while the integrated web server function allows remote access via a web browser, ensuring more efficient system startup and maintenance. This allows operators to easily manage status control, parameter setting programming and forced exit operations using the most common web browsers.

So what can be achieved with this SMC component in order to meet the additional requirements of Industry 4.0?

• Integrated counting of solenoid valve cycles - preventive maintenance.
• Remote access via web server - diagnosis, error correction.
• Integration of sensors / actuators.
• Standard open protocols.

We wrote this guide based on the following sources:

• Budget Law 2020, 27 December 2019, n. 160
• Accounting and budget guide of RIVISTE 24, Il Sole 24 Ore, 12 January 2017
• National Industry 4.0 Plan
• Milleproroghe decree (or southern decree) approved on February 9, 2017 by the Chamber and February 22, 2017 by the Senate
• Circular 4E of 30 March 2017 of the Revenue Agency and MISE
• Technical FAQ of the MISE of 19 May 2017
• South decree (DL n. 91/2017)
• Resolution of the Revenue Agency n. 152 of 15 December 2017 and circular letter no. 5477750 of 15 December 2017
• Budget Law 2021, 30 December 2020, n. 178
• Budget Law 2022, December 30, 2021, n.234

Thanks to Siemens for the example of the packaging machine and to Schmersal Italia, Tritecnica and SMC for the information on the components.

For further questions, information or technical assistance you can call us at 0396060351 - 0396060383 or write to info@quadrasrl.net .

Click on the orange button at the top of the page if you want to receive a quote for the necessary appraisal for assets over 300,000 euros.

To find out more about the tax credit mechanisms, call your tax advisor.