The new “Stability Bill” of 2015 introduces, to holders of business income that engage in research and development, the ability to opt, from the tax year following the year in progress at December 31, 2014, for the so called “Patent box”, an optional tax regime that allows to benefit from a partial exclusion from taxation of income derived from certain types of intangible assets. In particular, pursuant to art. 7, paragraph 5, of the Bill, income "arising from the use of intellectual property, industrial patents, trade marks as functionally equivalent to patents, as well as processes, formulas and information relating to experience acquired in the industrial, commercial or scientific legally protectable", do not concur as a component of the total income as excluded for 50% of the amount (reduced to 30% in 2015 and 40% in 2016).
These provisions are modeled on the experience of other European countries (eg UK, Spain, France, Netherlands, Belgium, Luxembourg) that have adopted similar schemes in order to avoid the "escape" of intangibles subject to States in a tax haven.
On the subjective level, the option in question would be exercisable by all holders of business income (corporations, partnerships and sole proprietorships), including the Italian permanent establishment of foreign entities residing in countries with which it is into force an agreement against double taxation and an effective exchange of information. If the Stability Law confirms the wording of the Bill in comment, it will be necessary, however, to interpret the exact objective scope of subsidy. In particular, it will be necessary to clearly identify the favoured "intellectual property" and "patent".
It may be also problematic the interpretation of the term "trade marks functionally equivalent to patents". On this point, the explanatory report explains that "for the application of the allowances provided for in paragraphs 3 to 11, trade marks are considered functionally equivalent to patents when their maintenance, enhancement or development requires incurring expenses for activities research and development; are in any case excluded from concession brands exclusively commercial". However, when you consider that, on the one hand, the essential condition for the existence of the brand is that the sign is capable of "distinguishing the goods or services of one undertaking from those of other undertakings" (art. 7 of Legislative Decree . n. 30/2005) and, on the other hand, "can not be subject to registration as a trade mark signs which consist exclusively of the shape from the nature of the product, the shape of goods necessary to obtain a technical result, or the shape which gives substantial value to the product "(art. 9 of Legislative Decree no. no. 30/2005), it is clear the difficulty of identifying a residual space for the category of" trade marks which are functionally equivalent to patents", the exploitation of which would be the subject of the favourable taxation.
The same drafter of the Bill seems aware of the lack of clarity of the rule, as formulated, so much so that the next paragraph of Article 10. 7, refers back to a decree of the Ministry of Economic Development, in consultation with the Ministry of Economy, the adoption of implementing rules, aimed, among other things, to identify types of brands that would not be worthy of the subvention here at issue.
Finally, within the scope of subsidy are included the "processes, formulas and information relating to experience in the industrial, commercial or scientific legally protectable", ie the so-called technical know-how, protected in our system under Article . 98 of Legislative Decree. N. 30/2005.
Income tax exempt are those arising from the right to use a third of the intangible assets in question, but also those derived from the direct use of the same. In the latter case, it will be necessary to identify, in contradiction with the Tax Office "ruling" in conformity with the provisions of art. 8 of Decree Law no. 269/2003 the "economic contribution" that the above intangible assets bring to the total income. Where income in comments are made in the context of transactions with companies that directly or indirectly control the enterprise being controlled or are controlled by the same company that controls the company, the benefit it provided that such income is determined on the basis of a special agreement with the Italian Tax Office.
The preferential taxation regime also provides for the exclusion from the income of the capital gains from the sale of intangible assets, provided that at least 90% of the consideration from the sale of such property is reinvested, before the close of the second tax period following that in which the sale occurred, maintenance or development of other intangible assets.
One of the limitations of the subsidy to report is that the exemption does not invest all income but only the portion determined by the ratio between the costs of research and development incurred for the maintenance, growth and development of the intangible asset and overall costs incurred to produce this good the reason that would have prompted the legislature to predict this relationship at the base of the exemption should be because that would mean connecting the facility to the sustaining of effective economic activity in Italy.
Finally, we note that the Bill provides that the exercise of the option has lasted for five fiscal years, is irrevocable, and is also relevant in connection to the regional tax on productive activities.