Digitalisation in 2021: the right time to purchase software
Purchasing software is extremely advantageous for companies in 2021, due to the many government incentives and funding currently available as part of the recent Italian Budget Legislation, aimed at those companies wishing to invest in digitalisation.
The switch to digital is crucial for any company wanting to remain competitive and offers many advantages in terms of production, communication and innovation. This is why the government’s new budget legislation is designed to support company growth in many different sectors.
Details of software purchase incentives
Digitalisation Incentives available to Italian companies have been expanded compared to previous years. They are now also available to artisans and other professionals and the scheme has been extended until 2022 and can be used for software purchase.
Applications are considered non-tangible goods and the maximum state contribution varies according to which application is being purchased. In other words:
- For software aimed at Industry 4.0 (programs for industrial design, industrial automation and robotics), the company making the investment is eligible for 20% of the total cost;
- For smart working (or remote working) applications, the available credit is 15%;
- For general management programs, the contribution is 10% of the cost for purchases made before 31st December 2021 and 6% for purchases up to 31st December 2022 respectively.
Although incentives for software purchase in 2021 are only valid for expenses incurred during the period 16th November 2021 to 31st December 2022, there is an exception: applications purchased before 30th June 2023 and ordered by 31st December 2022 are also included, as long as a down payment of at least 20% of the total cost has been made within that period.
How to request digitalisation funding
Company digitalisation funding can be requested and obtained by any company whose business premises are within Italian national boundaries. Associations registered in Italy are also eligible, even if their managers are not resident in Italy.
Access to funding is not affected by which sector the company operates in, nor its size or tax band. However, companies undergoing liquidation or legal procedures, or subject to punitive measures are excluded.
In order to access funding for software purchased during 2021, all relevant documentation must be provided, to verify that the purchase actually took place. It is also necessary to establish the correct amount due, according to the type of applications purchased, as mentioned above.
The simplest and quickest way to obtain digitalisation funding and avoid making any mistakes with the application, is to enlist the services of a trusted accountant, who will be able to give detailed advice on how to proceed.
It is important to remember that there is a maximum limit when applying for funding towards costs incurred in the purchase of software and other goods involved in the switch to digital. The relevant expenses must not exceed a total of 1 million euros.
The owners of the company involved can consult the Ministry for Economic Development’s website to find out more about other types of funding and tax breaks reserved for digitalisation. There are many kinds, applicable in different situations, but all of them are designed to encourage innovation in Italian business.
Translated by Joanne Beckwith
