Eligible activities for ordinary Patent Box and recapture mechanism

The eligible expenses for the Patent Box regime (PB) that are generally qualified as "research and development" expenses, according to the provisions of Article 6, paragraph 3 of Law Decree 146/2021, are those incurred within the scope of relevant activities as defined by the Provvedimento of 15 February 2022.

These include research and development activities (limited to industrial research and experimental development), technological innovation, and design and aesthetic ideation illustrated in the Decree of 26 May 2020 (Decree), which is the implementing decree of the tax credit regime referred to in Article 1, paragraphs 198 and following of Law 160/2019, currently in force.

The reference to the Decree seems unequivocal: the relevant activities can only be those that meet the same requirements for the allocation of the tax credit. For PB purposes, however, these must be aimed at the maintenance, enhancement, protection, and increase in the value of the intangible assets for which the five-year option is exercised.

Several operational concerns have arisen: it is not easy to fit expenses aimed at maintaining and/or increasing an asset within the definitions of research and development and technological innovation set forth by the MiSE Decree. For copyright-protected software but also, and especially, for industrial patents, the major innovative efforts usu...