PB is a tax incentive that companies across sectors have used as a value-creation lever, typically initiated by the head of tax or the CFO. Beyond the physiological effect of an additional tax deduction that reduces current taxes – also positively affecting cash flow - the incentive has driven companies to focus internal efforts on identifying protectable intellectual property (IP), potentially through to registration, with benefits that go beyond purely fiscal ones.

Practically speaking, to date the main advantages have stemmed from the recapture mechanism (meccanismo premiale) that allows the extra deduction of “creation” costs incurred up to the eighth tax period prior to the year in which the asset is registered.

Compared to the previous regime, the new PB has generated a greater benefit for costs related to the creation phase than for those incurred subsequently for the maintenance or enhancement of the asset. Exceptions – which are not uncommon – arise where significant investments are made to find new ways of using existing IP to design new products or services (as opposed to mere development of the IP itself).

That said, in addition to the different skills required to carry out the work (tax, legal, and technical), there are various operational chokepoints – some of which are common to other incentives – that affect the efficiency of the benefit de...