With the aim of stimulating the investments in the Italian southern regions (s.c. "Mezzogiorno"), the Italian Government has approved a new law decree, namely the "Southern Decree", introducing a new benefit called "unified ZES for the Mezzogiorno".

The benefit in question consists of a new tax credit for capital investments applicable from January the 1st , 2024, similar to the pre-existing incentive set forth in art. 1 § 98/108 of Law 208/2015 and in art. 5 § 2 of Law Decree 91/2017, expiring on December the 31st 2023.

Based on the preliminary press release of the Ministry of European Affairs, the South and the PNRR, the new and increased version of the ZES tax credit has now been extended to investments made in all the regions of Southern Italy.

Below is a list of the key aspects of the benefit in question, as anticipated by the Italian Government in a press conference:

  • Definition: the ZES or Special Economic Area ("Zona Economica Speciale" in Italian) is a specific area of the Italian territory where the economic and entrepreneurial initiatives carried out can benefit from relevant facilitations for the capital investments and development initiatives. The incentives are attributed to companies already operating in those areas as well as to new initiatives to be setup. The new unified ZES for the Mezzogiorno or "unified ZES", is conceived for businesses operating in the following regions:
    • Basilicata, Calabria, Campania, Molise, Puglia, Sicilia, Sardegna as per the exemption provided by art. 107 § 3 lett. a) of the Treaty on the Functioning of the European Union (TFEU);
    • Abruzzo, as per the exemption provided by art. 107 § 3 lett. c) of the TFEU and identified by the Regional Aid Charter 2022-2027.
  • Eligibility conditions: in order to benefit from a ZES tax credit, companies shall carry out capital investments in new instrumental assets intended for production sites located in the unified ZES areas.
  • Eligible period: from January the 1st , 2024 until December 31st, 2026.
  • Exclusions: companies operating in the following sectors are excluded from the benefit: steel, coal and lignite, transport and related infrastructure, production, storage, transmission and distribution of energy and energy infrastructure, broadband, credit, financial and insurance sectors. The tax credit is also excluded for companies in arrears as defined by point 18 of art. 2, EU Regulation no. 651/2014. In any case, investment projects with an overall value lower than € 200,000.00 are not eligible
  • Eligible investments: the eligible investments are those included into an initial investment project as defined by art. 2 points 49, 50 & 51 of Regulation No 651/2014, related to:
    • Acquisition or financial lease of machinery, plants and equipment intended for production sites existing or to be setup in the unified ZES territory;
    • Acquisition of lands and acquisition, construction or expansion of instrumental buildings. The total amount of the investments in lands and buildings cannot exceed 50% of the total eligible investment.

In any case, investment projects with an overall value lower than € 200,000.00 are not eligible

  • Facilitation: the incentive consists of a tax credit calculated on the total costs sustained for the eligible investments, with a maximum amount of € 100,000.00 per project. For the investments made in the form of financial leasing, the tax credit is calculated on the costs sustained by the lessor, without considering the maintenance costs.
  • Application: in order to benefit from the ZES tax credit, taxpayers shall file a specific application Form to the Italian Tax Office. The Form and condition for the application will be ruled with a future decree.
  • Cumulability: the ZES tax credit can be cumulated in compliance with art 1 § 102 of Law No 208/2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.