Super-amortisation on 140% for business capital goods - how it works

In Circular No. 23 of 26 May 2016, the Italian Revenue Agency clarified the procedures for the application of the 140% depreciation on the purchase of business assets introduced by the 2016 Stability Law.

Persons with business income and persons exercising the arts and professions who make investments in new tangible capital goods from 15 October 2015 to 31 December 2016.

Type of investments
The rule applies not only to the purchase of goods from third parties, whether owned or leased, but also to the realisation of the same in-house or by contract.
For such new tangible capital goods, an 'acquisition cost' surcharge of 40 per cent is payable for the sole purpose of determining depreciation allowances and lease payments.
Consequently, the goods must be of durable use and suitable for use as production tools within the company's production process.

Temporal scope
The 40 per cent increase in the acquisition cost applies to investments made from 15 October 2015 to 31 December 2016.

Application of the super-amortisation
The benefit results in a 40 per cent increase in the acquisition cost of the asset, which leads to an increase in the annual depreciation (or annual leasing fee) deductible for tax purposes.

If in 2016 you purchased an asset with a value of €10,000 subject to a depreciation charge of 20%, then you may have tax depreciation in your 2017 tax return of €2,800, i.e. 20% of €10,000 + 40% of €10,000 = 20% of €14,000 = €2,800

For further information: Inland Revenue circular