March 13, 2026 13:42

Italy’s Ministry of Economy and Finance (MEF) has announced that it will soon introduce legislation to amend parts of the 2026 Budget Law.
Among the planned changes is one affecting Transizione 5.0, a new investment incentive for companies that had already raised concerns among businesses and advisers.

The ministry said it will remove the rule restricting the benefit to purchases of machinery and equipment manufactured in the European Union or in countries of the European Economic Area. In practice, this means the scheme should no longer be tied to a “Made in EU” requirement.

The announcement came in a brief official statement, ahead of a dedicated legislative act that will formally amend the budget law approved on 30 December 2025.

To understand why this matters, it is useful to explain what Transizione 5.0 is. The measure forms part of Italy’s industrial policy and is designed to encourage companies to modernise production. In this case, the incentive takes the form of what in Italy is called iperammortamento, literally “super-depreciation” or “hyper-depreciation”.

This is not a direct cash subsidy. Instead, it is a tax incentive: companies that invest in eligible assets can deduct from taxable income an amount greater than the actual purchase price of the asset. The mechanism increases the tax value of the investment, allowing businesses to reduce future corporate tax payments.

Under this framework, the enhanced depreciation rates are set at 180% for investments of up to €2.5 million, 100% for the portion between €2.5 million and €10 million, and 50% for the portion between €10 million and €20 million.

Assuming Italy’s standard corporate income tax rate of 24%, the tax saving could be significant. Depending on the investment bracket, the effective benefit is estimated to range from 43.2% at the top rate to 12% at the lowest.

So far, however, the measure has not yet become operational. The incentive remains effectively on hold while the government prepares the implementing decrees, the secondary regulations needed to define how companies can actually apply for and use the benefit.

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