Incentives for earth-moving machines in Italy: Legge Sabatini and Industria 4.0

Are you an Italian enterprise? Now is the perfect time to renew your fleet, thanks to the Legge Sabatini and the Industria 4.0 incentives!

In this article we will explain in a simple way what this is all about, to give you an idea of the opportunities you have to buy your next construction equipment.

Of course, these incentives do not only apply to construction machinery, but to all types of work machinery in general. 


Incentives "Industria 4.0"

This category of incentives is designed to encourage the technological upgrading of Italian companies.

For this reason, to be eligible for the incentives, the machine purchased must meet certain basic technical requirements:

  • Programmability. The machinery must be controlled by programmable elements. These can be industrial automation systems of the CNC or PLC type, but also personal computers.
  • Interconnection. The machinery must be able to receive instructions remotely.
  • Interconnection with machines in the same production system.
  • Simple and ergonomic man-machine interface.
  • Fulfilment of the latest legal requirements for health and safety (according to the national and regional Italian laws). Attention: CE marking is a necessary but not sufficient condition!

In addition to this, the machine must:

  • Be able to be remotely inspected to detect issues.
  • Possess adaptive monitoring sensors according to process conditions. In essence, the sensors 'suggest' to the machine to activate the most suitable procedures according to the conditions of the moment.
  • Be modelled in a virtual space. This means that the machine can be moved to a virtual twin on which to carry out tests.

Thepurchased machine must be new. Second-hand machines are therefore explicitly excluded, but the possibility of the machine containing used or reconditioned parts is contemplated.


Is a technical expertise needed?

The technical expertise is an examination by an expert who verifies whether the machine meets all technical requirements.

In this case, to be precise, it is referred to as a sworn appraisal since it serves as 'official proof' to start the path to obtaining the incentive.

As of 2020, the appraisal is no longer mandatory for purchases up to 300,000 euro. A simple self-certification by the legal representative of your company will be enough.

However, some technical definitions require advanced expertise and, as a result, it is difficult for non-experts to make a precise and accurate assessment.

If you are not sure of your expertise, you can use an expert even if the amount is less than EUR 300,000. Just remember to choose a professional not linked to the supplier of the car you are going to buy. If any conflicts of interest emerge, your application for the tax credit may be rejected.


Industry 4.0 incentives: what is the "Credito d'Imposta"?

There is much confusion on this point.

In recent years, there has in fact been much talk about the so-called "iperammortamento". Basically, a higher price was charged for the purchased goods for tax purposes than was actually paid. In this way, the higher price was deducted from profits, on which companies pay taxes. As a result, a tax advantage could be obtained, which was, however, rather complicated to estimate.

This year, the iperammortamento is not included in the Industry 4.0 incentives, which are now based on the Credito d'imposta (tax credit), a simpler and more intuitive concept.

With the tax credit, beneficiaries can get a 'tax discount' from the Modulo F24 that is calculated as a percentage of the price of the purchased good.

The tax credit changes depending on the date you make the payment for the purchase of your 4.0 machinery and the amount due for the purchase of the asset.

  • If the total expenditure is less than EUR 2.5 million, the tax credit reaches 40 per cent of the total expenditure
  • If the total expenditure ranges from EUR 2.5 million to EUR 10 million, the tax credit is 20 per cent
  • If the total expenditure is more than EUR 10 million and less than EUR 20 million, the percentage on which the tax credit is calculated drops to 10%.

If you make the purchase after 31/12/2022, the tax credit is halved:

  • For expenditure of less than 2.5 million, the allowance is 20% of the amount
  • For expenditure between 2.5 million and 10 million, the percentage is 10%.
  • For expenditure between 10 and 20 million, the tax credit drops to 5%.

Who can apply for the Enterprise 4.0 incentive?

OK, you have found your construction machine, and made sure it meets all the requirements of the Industry 4.0 incentives.

What do you have to do to apply for the incentives?


The Requirements

All companies based in Italy can apply for the tax credit. The machinery purchased must be operational within Italian territory.

In addition, in order to qualify for the credit, the company must not be subject to liquidation, bankruptcy or disqualification sanctions, it must apply the occupational safety regulations of the sector in which it operates, and it must be in order with the payment of social security and welfare contributions to its employees.


How to Apply for Credito d'Imposta 4.0

First of all, you will have to locate the goods you need from a trusted supplier. Then produce the expert report or self-declaration.

Once done, you will have to send the request to the MISE (Italian Ministry of Economic Development).

Remember that you must keep all tax documentation with express reference to the facilitation in accordance with the Italian law.

For assistance with the bureaucratic process you can apply to one of the many agencies specialised in helping companies obtain state incentives. Otherwise, you can get advice from your supplier.


Can the Industry 4.0 subsidy be combined with other subsidies?


That is why you should read the next paragraph...


Legge Sabatini (Sabatini Law)

The Sabatini Law provides financing at favourable interest rates for the purchase of machinery, equipment and software. The financing is provided by a banking institution and can cover up to 100% of the amount spent for purchases from 20,000 euros up to 4,000,000 euros.


What does the Sabatini Law finance?

Basically, the Sabatini Law finances the purchase or leasing of:

  • Capital goods such as machinery, equipment, etc.
  • 4.0 investments i.e. related to digital technological innovations
  • Green investments i.e. related to energy saving and pollution reduction
  • Assets that fall into more than one category

The assets must:

  • Be new. So the purchase of used MMT is not included.
  • Be functionally autonomous. Spare parts are not included, only the machines in their entirety.
  • Be related to the company's activity. You can therefore only apply for finance to purchase a construction machine if you can prove that it will be useful for your work.
  • Not be assets already present in the company. The Sabatini law requires you to upgrade the technology of your machinery. It does not allow you to purchase something you already have.


How does it work?

The Italian small company submits the financing request to the bank or financial intermediary authorised by the MISE by certified electronic mail.

The request must be digitally signed and filled in with the relevant attachments.

The bank verifies the correctness of the information.

Each financing request is assessed on a case-by-case basis by the Italian Ministry of Economic Development. The financing, once approved, is disbursed by an authorised banking institution.

The key aspect of the Sabatini law is the presence of a 'discount' on the interest of the loan, calculated in varying percentages:

  • 2.75% for investments in capital goods
  • 3.575% for 4.0 and green investments

The total interest is calculated over a 5-year period, regardless of the timing of the financing.

As with 4.0 incentives, there are agencies on the market that can help you through the bureaucratic process. Alternatively, ask your supplier: they can give you sound advice.


Who can apply for funding?

In general, all Italian small companies in all sectors can apply. Companies in the finance, insurance and export sectors are excluded.

In addition, companies must be registered in the commercial register, not be in bankruptcy or liquidation and not be subject to insolvency proceedings.


Sabatini Sud 

Companies with registered offices in southern Italy can access favourable conditions.

  • Micro and small enterprises can also apply, provided they have their registered office in southern Italy.
  • The annual interest rate is 5.5% for all types of goods or investments.


In conclusion

The information we have shared in this is about the incentives for purchasing construction machinery in the year 2022. This means that you will have to pay the 20% down payment by the end of the year, and the physical delivery of the machine will have to take place by June 2023. 

If you decide to buy in 2023, it is very likely that there will be new rules and different incentives. 

What we can tell you is that, tendentially, the more years go by, the lower the margin you can get from financing.

Therefore, if you want to take advantage of all the benefits, we advise you not to wait, but to act now!

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