For income tax purposes, the 2016 Stability Bill introduced a 140 percent depreciation allowance on new tangible capital goods purchased from Oct. 15, 2015 to Dec. 31, 2016, for businesses and those engaged in the arts and professions. The benefit, although not yet finally approved, is already “operational” because it covers purchases made on or after October 15, 2015.Therefore, it is a good idea to start doing some calculations to check the real benefits you are getting.
Super depreciation on capital goods
The rule stipulates that – for income tax purposes – for individuals holding business income and for merchants arts and professions who make investments in new tangible capital goods from Oct. 15, 2015 to Dec. 31, 2016, with exclusive reference to the determination of depreciation rates (provided for in Ministerial Decree Dec. 31, 1988), the acquisition cost is increased by 40%.
Unlike previous investment incentives, which were reserved for businesses, the new increased depreciation allowance also covers purchases of new capital goods made between Oct. 15, 2015, and Dec. 31, 2016, by those in the arts and professions. Professionals differ from businesses in that in the year of purchase of the asset the depreciation rate does not have to be reduced to half: this will result in a shorter depreciation period, and bonus payback period.
Super Depreciation 2016 is a measure, which will allow, companies that purchase a capital asset that is functional to production and the business activity itself, including Concrete Mixing Plants, Prefabrication Plants, Mixers, Concrete Truck Washing Plants, to depreciate the cost of the same by 140%.
The surcharge does not apply to purchases of tangible capital goods for which Ministerial Decree Dec. 31, 1988 stipulates. Depreciation coefficients of less than 6.5 percent, to purchases of buildings and of constructionsas well as to purchases of the assets of which the specific is contained in this bill, particularly to pipelines, pipelines, rolling stock and aircraft.