"Hyper-Depreciation 2026" in Italy: a new incentive for companies doing investments

the 2026 Finance Act provides a cut of corporate tax for purchase of assets, machineries and instrumental goods of EU origin

Companies incorporated in Italy which can benefit from this incentive by depreciation of their investments at increased rates, can significantly reduce their tax burden.

Modern company in Italy using new tecnological tools

Description

Article 1, paragraph 427 of the 2026 Budget Law approved in Italy introduced "hyper-depreciation." This allows companiess to increase the taxable value of newly purchased technologically advanced capital goods, thereby reducing their taxable profit through a tax deduction of an amount greater than the actual cost.

Companies based in Italy benefiting from the incentive will be able to depreciate their investments at increased rates, significantly reducing their tax burden.

The applicable hyper-depreciation rates vary based on the size of the investment. For example:

- If a company purchases a € 100,000 piece of machinery, it can apply a 180% increase and deduct depreciation calculated on a value of € 280,000. Therefore, the 180% increase in cost (i.e., 2.8 times the standard deduction) for investments up to € 2.5 million corresponds to an IRES (corporate tax) tax saving of 43.2% (based on an IRES rate of 24%).

- A 100% increase for investments exceeding € 2,5 million and up to € 10 million corresponds to an additional 24% IRES tax saving.

- A 50% increase for investments between €10 and € 20 million corresponds to an IRES tax saving of 12%.

Other features of the 2026 "Hyper-Depreciation" incentive

The Hyper-Depreciation incentive is valid for investments made from January 1st, 2026, to September 30th, 2028.

The eligible assets must be produced in European Union or EAA countries (European Economic Area: EU + Iceland, Liechtenstein, and Norway) countries.

Unlike previous tax credits, which were typically available over 3 or 5 years, the Hyper-Depreciation benefit is spread over the entire useful life of the asset, known as the ordinary depreciation period.

The company benefiting from the incentive must have sufficient profits to "absorb" the increased deduction.

Expenditures exceeding € 20 million are not eligible for the benefit.

List of types of assets eligible for the 2026 "Hyper-Depreciation" incentive

The list of assets eligible for the "hyper-depreciation" incentive includes:

- technologically advanced tangible assets 4.0, such as machinery, systems, and interconnected high-tech devices, such as:

• devices, instrumentation, and intelligent components for the integration, sensorization, and/or interconnection and automatic control of processes, including those used in the modernization or revamping of existing production systems;

• coordinate and non-coordinate measuring systems (contact, non-contact, multi-sensor, or based on 3D computed tomography) and related instrumentation for verifying product micro- and macro-geometric requirements at any dimensional scale (from large scale to micrometric or nanometric scale) to ensure and track product quality and to qualify production processes in a documentable manner and connected to the factory information system;

• other in-process monitoring systems to ensure and track product or production process quality, enabling production processes to be validated in a documentable manner and connected to the factory information system;

• systems for material inspection and characterization (e.g., material testing machines, machines for testing manufactured products, non-destructive testing systems, tomography) capable of verifying the characteristics of materials entering or exiting the process and constituting the resulting product at the macro (e.g., mechanical characteristics) or micro (e.g., porosity, inclusions) level, and generating appropriate test reports for inclusion in the company information system;

• intelligent devices for testing metal powders and continuous monitoring systems that enable production processes to be validated using additive technologies;

• intelligent and connected systems for marking and tracking production batches and/or individual products (e.g., RFID - Radio Frequency Identification);

• systems for monitoring and controlling machine operating conditions (e.g., forces, torque, and machining power; three-dimensional wear of on-board tools; status of machine components or subassemblies) and production systems interfaced with factory information systems and/or cloud solutions;

• tools and devices for automatic product labeling, identification, or marking, linked to the product code and serial number, enabling maintenance personnel to monitor product performance consistency over time and influence the design process of future products synergistically, allowing for the recall of defective or harmful products;

• intelligent components, systems, and solutions for the management, efficient use, and monitoring of energy and water consumption and for reducing emissions;

• filters and systems for the treatment and recovery of water, air, oil, chemicals, and dust, with systems that report filtering efficiency and the presence of anomalies or substances that are foreign to the process or hazardous, integrated with the factory system and capable of alerting operators and/or halting machine and plant operations;

• devices for human-machine interaction and for improving ergonomics and workplace safety in accordance with Industry 4.0;

• benches and workstations equipped with ergonomic solutions that can automatically adapt to the physical characteristics of operators (e.g., biometric characteristics, age, disability);

• systems for lifting/moving heavy parts or objects exposed to high temperatures that can intelligently/robotically/interactively facilitate the operator's task;

• wearable devices, communication equipment between operator(s) and the production system, augmented reality and virtual reality devices;

• intelligent human-machine interfaces (HMIs) that support operators in ensuring the safety and efficiency of manufacturing, maintenance, and logistics operations.

- systems for the self-generation of energy from renewable sources intended for self-consumption, for example: high-efficiency photovoltaic systems, integrated energy storage systems functional to the company's production process;

- intangible assets (software) functional to Industry 4.0 transformation; systems and digital platforms functional to the technological and digital transformation of companies, already listed in Annex A of Law 232/2016:

• metal removal machine tools;

• machine tools operating with lasers and other energy flow processes (e.g., plasma, waterjet, electron beam), electrical discharge machining, electrochemical processes;

• machines and systems for manufacturing products by transforming materials and raw materials:

• machine tools for the plastic deformation of metals and other materials;

• machine tools for assembly, joining, and welding;

• packaging and wrapping machines;

• de-manufacturing and re-packaging machine tools to recover materials and functions from industrial waste and end-of-life products (e.g., machines for disassembly, separation, crushing, chemical recovery);

• robots, collaborative robots, and multi-robot systems;

• aachine tools and systems for adding or modifying the surface characteristics of products or functionalizing surfaces;

• additive manufacturing machines used in industry;

• machines, including motors and operating machines, tools and devices for loading and unloading, handling, weighing, and automatic sorting of parts, automated lifting and handling devices, AGVs and flexible conveyor and handling systems, and/or those equipped with part recognition (e.g., RFID, viewers, and vision and mechatronic systems);

• automated warehouses interconnected with factory management systems;

• all the above-mentioned machines must have the following features:

• control by CNC (Computer Numerical Control) and/or PLC (Programmable Logic Controller);

• interconnection with factory IT systems with remote loading of instructions and/or part programs;

• automated integration with the factory logistics system or with the supply network and/or with other machines in the production cycle;

• simple and intuitive human-machine interfaces;

• compliance with the latest occupational health, safety, and hygiene standards;

and assets enlisted in Annex B of Law 232/2016:

• software, systems, platforms, and applications for the design, performance definition/qualification, and production of products made from unconventional or high-performance materials, capable of enabling the design, 3D modeling, simulation, testing, prototyping, and simultaneous verification of the production process, the product, and its characteristics (functional and environmental impact) and/or the digital archiving and integration of product lifecycle information into the company information system (EDM, PDM, PLM, Big Data Analytics systems);

• software, systems, platforms, and applications for the design and redesign of production systems that take into account material and information flows;

• decision support software, systems, platforms, and applications capable of interpreting data analyzed in the field and displaying specific actions to online operators to improve product quality and production system efficiency;

• software, systems, platforms, and applications for production management and coordination with high levels of integration of service activities, such as factory logistics and maintenance (e.g., intra-factory communication systems, fieldbuses, SCADA systems, MES systems, CMMS systems, innovative solutions with features attributable to IoT and/or cloud computing paradigms);

• software, systems, platforms, and applications for monitoring and controlling the working conditions of machines and production systems interfaced with factory information systems and/or cloud solutions;

• virtual reality software, systems, platforms, and applications for the realistic study of components and operations (e.g., assembly), both in immersive and visual contexts;

• reverse modeling and engineering software, systems, platforms, and applications for the

• virtual reconstruction of real-world environments;

• software, systems, platforms, and applications capable of communicating and sharing data and

• information both among themselves and with the surrounding environment and stakeholders (Industrial Internet of Things) thanks to a network of interconnected intelligent sensors;

• software, systems, platforms, and applications for dispatching activities and routing products within production systems;

• software, systems, platforms, and applications for quality management at the production system level and related processes;

• software, systems, platforms, and applications for accessing a virtualized, shared, and configurable set of resources to support production processes and production and/or supply chain management (cloud computing);

• software, systems, platforms, and applications for industrial analytics dedicated to the processing and elaboration of big data from IoT sensors applied in the industrial sector (Data Analytics & Visualization, Simulation, and Forecasting);

• artificial intelligence and machine learning software, systems, platforms, and applications that enable machines to demonstrate intelligent abilities and/or activity in specific fields, ensuring the quality of the production process and the reliable operation of machinery and/or systems;

• software, systems, platforms, and applications for automated and intelligent production, characterized by high cognitive capacity, interaction and adaptation to context, self-learning, and reconfigurability (cybersystems);

• software, systems, platforms, and applications for the use of robots, collaborative robots, and intelligent machines along production lines for worker safety and health, end-product quality, and predictive maintenance;

• software, systems, platforms, and applications for managing augmented reality via wearable devices;

• software, systems, platforms, and applications for devices and new human-machine interfaces that enable the acquisition, transmission, and processing of information in vocal, visual, and tactile formats;

• software, systems, platforms, and applications for plant intelligence that ensure energy efficiency and decentralization mechanisms in which energy production and/or storage can also be delegated (at least partially) to the factory;

• software, systems, platforms, and applications for protecting networks, data, programs, machines, and systems from attacks, damage, and unauthorized access (cybersecurity);

• virtual industrialization software, systems, platforms, and applications that, by virtually simulating the new environment and uploading the information to cyber-physical systems once all checks are complete, avoid hours of testing and downtime along real production lines;

• supply chain management systems for drop shipping in e-commerce;

• digital software and services for immersive, interactive, and participatory use, 3D reconstructions, and augmented reality;

• software, platforms and applications for the management and coordination of logistics with high levels of integration of service activities (intra-factory communication, factory-field communication with telematic integration of on-field devices and mobile devices, telematic detection of performance and faults of on-field devices.