With the 2026 Budget Law (Law No. 199 of 30 December 2025 199), the Italian legislator has once again revised the system of tax incentives for investments in newly acquired tangible and intangible capital assets, reintroducing the super depreciation regime (iperammortamento) to replace the Transition 4.0 and Transition 5.0 tax credits.

The measure, governed by Article 1, paragraphs 427–436 of the aforementioned Law, continues Italy’s policy of supporting businesses’ technological transformation, while significantly changing both the underlying rationale and the practical mechanisms through which the incentive operates.

The super depreciation regime applies to investments made between 1 January 2026 and 30 September 2028, providing a multi-year time horizon aimed at restoring greater certainty in investment planning after a period characterized by short-term incentive schemes and limited funding.

Unlike tax credits, super depreciation operates through an increase in the tax basis of eligible assets. The benefit is therefore reflected in higher deductible depreciation charges and lease payments, directly reducing taxable income over the useful life of the investment.

As a consequence, the incentive produces tax benefits only where the taxpayer generates taxable income. In loss-making years, the benefit is not forfeited but is deferred to subsequent tax periods. The additional deduction is relevant exclusively for IRES and IRPEF purposes, while it has no impact for IRAP purposes.

The incentive is available to businesses earning business income that invest in capital assets intended for production facilities located within Italy.

Companies undergoing liquidation, entities subject to insolvency proceedings without business continuity, and businesses subject to disqualifying sanctions are excluded from the regime.

For eligibility purposes, only the date on which the investment is deemed to have been made is relevant, determined according to the ordinary tax accrual principles set out in Article 109 of the Italian Income Tax Code (TUIR).

The enhanced deduction is structured according to the following investment brackets:

• 180% for investments up to €2.5 million;
• 100% for investments exceeding €2.5 million and up to €10 million;
• 50% for investments exceeding €10 million and up to €20 million.

The scope of the incentive includes both tangible and intangible capital assets with a high technological content, as identified in the new Annexes IV and V to the Budget Law, which have been updated to reflect the ongoing digital transformation of manufacturing processes.
The regime also covers investments related to the self-generation of energy from renewable sources for self-consumption, provided that the technical requirements established by the legislation are satisfied.

Overall, the new super depreciation regime represents a highly attractive incentive for businesses. Its extended duration facilitates more effective long-term investment planning, while the updated annexes broaden the range of eligible assets and encourage the adoption of advanced technological solutions.

However, one final step is still awaited: the implementing decree, expected within thirty days of the publication of the Budget Law. This decree will clarify the operational procedures, required documentation, and interaction with other available tax incentives, ultimately transforming the legislative framework into a fully operational tool for businesses.