New Transition Plan 5.0 - Practical and Interpretive Issues of the New Hyper-Depreciation Regime

Edited by Vitalba Passarelli, Gian Maria Minnella and Alessandro Sinopoli

The 2026 Budget Law (Art. 1, paragraphs 427-436, Law 199/2025) reintroduced, effective 1 January 2026, the increase in the tax-relevant cost of new capital goods, a measure already known as “hyper-depreciation” in its first formulation (2017-2019). The incentive replaces the 4.0 and 5.0 tax credits, marking a shift in approach in fiscal policy supporting investments.

The progressive completion of the regulatory and implementing framework has contributed to defining with greater precision several aspects of the new incentive, particularly with reference to access requirements, required compliance obligations and the functioning of the benefit utilisation mechanism, while at the same time raising certain interpretive and application issues of particular operational interest.

It bears noting that, as of today, the MIMIT Decree of 7 May 2026, which defined the implementing procedures of the measure, has not yet been published in the Official Gazette.

Structure and Functioning of the Incentive

The mechanism operates through an increase in the tax basis for the purpose of calculating depreciation allowances and finance lease payments, according to a system of progressive rates by investment brackets, with effects exclusively for IRES purposes, by means of an off-book tax adjustment to be made in the Income Tax Return (Modello Redditi).

All taxpayers deriving business income may benefit from the incentive (regardless of legal form, company size, business sector or method of income determination) who make investments in new capital goods intended for production facilities located within the territory of the State, provided that the provisions on workplace safety and the obligations for regular payment of social security and welfare contributions are complied with.

The following are excluded: self-employed workers and professionals; entities that determine income under flat-rate criteria or substitute tax regimes; companies in a state of crisis (voluntary liquidation, bankruptcy or other insolvency proceedings); companies subject to disqualification sanctions pursuant to Legislative Decree 231/2001.

Temporal Scope and New Provisions on Geographic Origin of Goods

The incentive applies to investments made from 1 January 2026 to 30 September 2028.

For the purpose of identifying the moment of tax relevance, the ordinary rules of fiscal accrual apply (Article 109, Italian Tax Code): for 4.0 goods, the relevant date is, for example, the date of delivery or shipment, or, if later, the moment of transfer of ownership. For goods intended for the self-production and self-consumption of energy from renewable sources, the relevant date is instead the date of completion of works.

One of the most significant amendments introduced in the post-approval phase concerns precisely the requirement of geographic origin of goods. The original text of the 2026 Budget Law limited the benefit solely to goods produced in Member States of the European Union or in States adhering to the European Economic Area (EEA). Article 7 of Decree-Law 38/2026, as converted, eliminated such restriction with retroactive effect (with the exclusion of photovoltaic systems): it follows that the incentive is now granted regardless of the country of production of the good, without geographic restrictions on origin. The amendment has significant practical implications for companies sourcing from extra-EU suppliers, particularly in the machinery and automation systems sector.

Eligible Goods

The incentive applies to the following categories of goods:

new tangible and intangible capital goods included in Annexes IV and V to the 2026 Budget Law (in summary, respectively: goods whose operation is controlled by computerised systems, quality and sustainability systems, human-machine interaction devices in 4.0 logic, data processing and transmission goods; software, platforms, applications, algorithms and digital models functional to digital transformation), provided they are interconnected to the company’s production management system or to the supply network;

new tangible goods intended for the self-production of energy from renewable sources for self-consumption, including at a distance, including storage systems for the energy produced. With regard to photovoltaic systems, the specific technical requirements and the constraint of production within EU Member States remain in force – also following the amendments under Decree-Law 38/2026, as converted. Only photovoltaic modules with cells both produced in the EU with cell-level efficiency of at least 23.5% are eligible, or modules produced in the EU consisting of bifacial heterojunction silicon cells or tandem cells with cell efficiency of at least 24%.

For completeness, it should be noted that, based on the MIMIT Decree of 7 May 2026, “software-as-a-service” solutions appear to fall outside the scope of the incentive.

Amount of the Benefit

The increase operates on an annual bracket basis, with reference to each tax period (2026, 2027, 2028) and not on the entire three-year period considered cumulatively, as clarified by the Technical Report to Decree-Law 38/2026 and already in line with the interpretation adopted by the Revenue Agency for the 4.0 tax credit (Circular No. 14 of 17 May 2022):

180% for investments up to 2.5 million euros;

100% for investments exceeding 2.5 million euros and up to 10 million euros;

50% for investments exceeding 10 million euros and up to 20 million euros.

Investments exceeding the threshold of 20 million euros do not benefit from any increase.

By way of example, for a 4.0 tangible good purchased in 2026 at a cost of 2.5 million euros (first bracket), the hyper-depreciation generates an additional aggregate IRES tax saving of approximately 1.08 million euros, spread over the tax depreciation period.

Access Procedure

Access to the incentive is not automatic and is subject to the electronic transmission of specific notifications through the GSE IT platform (accessible via SPID or CIE), according to a more detailed procedure compared to the previous 4.0 tax credit:

Preliminary notification: to be submitted for each production facility involved, indicating the identification data of the company and the production facility, the type and amount of investments in 4.0 goods, as well as the expected date of completion and interconnection; the type and amount of investments in goods for the self-production and self-consumption of energy from renewable sources, as well as the expected commissioning date; data relating to the application of the increase in depreciation allowances and capital lease payments. In the absence, to date, of specific indications in the MIMIT Decree, submission should also be permitted after the purchase order has been placed.

It should also be noted that – for the purpose of submitting preliminary notifications – the GSE platform has been operational since 12 June 2026.

Confirmation notification: to be transmitted within 60 days from notification of approval by the GSE, indicating the date and amount of payment of the last advance instalment (20% of the cost of the individual asset, unlike the previous regime in which the threshold was calculated on the overall cost of the investment). For finance leases, the obligation is deemed fulfilled upon execution of the contract and signature of the purchase order by the lessor.

Completion notification: to be transmitted, at the latest, by 15 November 2028, upon completion of investments and after interconnection of the goods. It must be accompanied by the sworn technical appraisal (aimed at certifying the technical characteristics of the goods and the completed interconnection) and the accounting certification by the statutory auditor (aimed at certifying the effective incurrence of eligible expenditures). Unlike the 4.0 tax credit regime, the self-certification in lieu of the technical appraisal for goods valued at less than 300,000 euros is not permitted: the sworn technical appraisal is always required, regardless of the amount of the investment.

Monitoring notifications: required from the first preliminary notification until the end of the benefit utilisation period, for the purpose of monitoring public expenditure. By 20 January of each year, a periodic notification must be transmitted with data on investments made, costs incurred and the expected utilisation of the benefit; by the following 30 June, a supplementary notification must be submitted with the depreciation schedule and the indication of the tax incentive portions allocated to each financial year.

Failure to submit the preliminary, confirmation and completion notifications within the prescribed deadlines and in the prescribed manner results in forfeiture of the right to the benefit. As a general matter, it should also be noted that each notification (confirmation and completion) may not concern investments in goods other than, or in amounts exceeding, those indicated in the preliminary notification; this aspect entails the need for a careful analysis, not only of the timing, but also of the type and volumes of investment.

Tax Effects and Management Profiles

The right to the IRES downward adjustment for 2026 is subject to the concurrent occurrence of the submission with approval of the completion notification to the GSE (therefore including the completion of the interconnection of the goods and the finalisation of the mandatory supporting documentation) and the commissioning of the eligible assets, both by 31 December 2026.

The adjustment produces, depending on the income position of the company, a reduction of the IRES taxable base or an increase in the carry-forward tax loss (Article 84, TUIR). Additionally, further possibilities for tax optimisation are noted in the event of participation in the IRES tax consolidation regime.

With respect to IRES advance payments for the 2026 tax period, the calculation must be performed without taking the incentive measure into account: the benefit is therefore entirely deferred to the moment of payment of the IRES balance (June 2027).

With reference to operational management, it is advisable to implement within the company’s ERP system a dedicated alert to promptly intercept any disposals or transfers of 4.0 goods during the benefit utilisation period: the transfer for consideration or the relocation abroad generally entails the cessation of the preferential regime, unless replacement with a good of analogous or superior characteristics occurs in the same tax period.

It should be noted that, finally, Article 7 of Decree-Law 38/2026, as converted, provided that the hyper-depreciation be included among the items deductible from the income subject to the biennial advance tax settlement (concordato preventivo biennale).

Cumulation

The hyper-depreciation is cumulative with other national and European incentive measures relating to the same costs, subject to two conditions: the cumulation must not exceed the total cost incurred and the different measures may not apply to the same investment portions. For the purpose of calculating the increase, the eligible base is taken net of other grants or contributions received.

Cumulation with the 4.0 tax credit is expressly excluded (applicable to investments made in the period 1 January – 31 December 2025, or by 30 June 2026 for investments qualifying under the booking mechanism by 31 December 2025). The following measures also appear compatible with the new regime, pending appropriate official clarifications from the Revenue Agency: the cancellation of the booking made for the purposes of the 4.0 tax credit due to exhaustion of resources; investments commenced under previous regimes but not completed by 31 December 2025; investments qualifying under the booking mechanism by 31 December 2025 but not completed by 30 June 2026.

The hyper-depreciation is excluded from the State aid rules as a general measure, lacking the selectivity requirement under Article 107, TFEU: consequently, no notification obligation to the European Commission is required and the aid-intensity limits generally applicable to selective State aid measures do not apply.