Tax credits for research and development: Revenue / MISE clarifications on design and aesthetics

With Decision no. 41 of 26 July 2022 Tax Agency provides clarifications on the tax deduction for investments in research and development activities (Activities related to design and aesthetic ideas – Article 3 of the legislative decree of 23 December 2013, no. 145)

In particular with reference to a technical opinion from MISE, the tax authorities clarify this design and prototypes of goods in fashion, leather goods, jewelery and glasses and subsequent production are not part of the eligible research and development activities with the tax deduction according to Article 3 of Legislative Decree 145/2013.

The applicant company, which is part of a group, had approached the MISE for a technical opinion according to the procedure for the examination of the applications and requested to benefit from the tax deduction in question (referred to in Article 3 of the draft law ). Decree 145/2013).

With the answer from April 2022, MISE reminded that land activities that qualify as research and development are those that are specifically carried out, as part of an innovation process carried out by a company, to overcome one or more scientific or technological uncertainties, the solution of which would not be possible on the basis of the latest technology of the sector, i.e. by applying techniques or knowledge already known and available in a specific scientific or technological sector, with the aim of achieving the creation of new products or processes or significant improvement of already existing products or processes.

These are activities that are characterized by presence of elements of novelty and creativity and therefore also because of the degree of uncertainty or risk of scientific or technological error that they usually involve.

MISE emphasized that the scope of the tax credit does not automatically include all the activities that the company carries out in its innovation process, but only those characterized by the presence of real research and development content according to the criteria for classification and qualification indicated above.

The criteria, the ministry emphasizes, they must be understood as applicable to all economic sectors with the adaptations of terms and concepts that the different sectors require due to their specificity.

With regard to the present case it is believed that the activities carried out, related to design and aesthetic ideas, the purpose of which is the design and realization of new collections or samples that present elements of novelty compared to the previous collections or samplesi with regard to the materials used, their combination, design, shapes, colors and other relevant elements, but whose only “technical effect” in a broad sense relates to the external form or aesthetic aspect of the product, ndo not constitute research and development activities eligible for bonus because they do not in principle involve the performance of work necessary to overcome obstacles of a scientific or technological nature cannot be overcome with the general knowledge already available.

Furthermore, activities in connection with market research aimed at collecting data on consumer tastes and habits and activities in connection with assessment of product satisfaction from an aesthetic point of view, which are necessary for the correct positioning of a new collection, also to identify the insertion market .

According to mise and the agency, activities that aim to modify the aesthetics of products in a broad sense and launch new fashion trends, but do not aim to resolve a technical or scientific uncertainty, must be considered excluded.

As far as MISE is concerned, the activities that the applicant company has carried out in the tax period 2019, as described in the submitted documentation, do not as a whole constitute research and development activities in the sense that is relevant for the effects of the tax deduction.

The agency concludes in the decision, with reference to the MISE opinion, that the Alfa company cannot benefit from the research and development tax credit according to art. 3 of Legislative Decree 145/2013.

Leave a Comment