Industry 4.0, the innovative enterprise of the future

From sensors to the Internet of Things, from the cloud to robotics. Digitalisation is transforming manufacturing companies and making them more competitive. This is why the Ministry of Economic Development has devised a series of tax incentives

Published on 3 February 2020

Incentives and tax breaks for industry 4.0 - Enel X

For some time now it has become commonplace to define innovative companies, particularly those operating in the manufacturing sector, as “4.0 enterprises”. Everything started with a project launched by the German government in 2011, aimed at facilitating the development of a series of technologies called “Industrie 4.0”, from where the Italian title Industria 4.0 was derived. What is it exactly? The term refers to the technologies which, according to experts, characterise the fourth industrial revolution: the first saw the introduction of steam powered machines; the second made mass production possible thanks to the advent of electricity and the wide availability of energy; the third signalled the rise of IT and computers.

The fourth is happening as a result of the simultaneous growth of a number of different technologies that are now more reliable and affordable, such as miniaturised sensors that are easier to install on machines, then there's the Internet of Things (IoT), the cloud, the analysis of Big data and artificial intelligence. Combined with automation and robotics these solutions enable the so called digitalisation of enterprises, in other words the possibility to gather large quantities of data on the functioning of machines and production facilities through which, thanks to software and algorithms, it's possible to manage and programme orders, production, the procurement of raw materials, maintenance and shipping.

The combination of Industry 4.0 technologies contributes to making companies more competitive and cost effective, improving quality, reducing waste and optimising the use of energy, thus avoiding the need to relocate production offshore to countries with lower labour costs. Indeed, these developments require more specialised staff who are accustomed to using digital technologies and carrying out supervisory activities as opposed to manual tasks.

In 2017, due to the undoubted benefits of digitalisation, Italy's Ministry of Economic Development launched a plan called Piano Industria 4.0, subsequently renamed Piano Impresa 4.0. The Plan was principally based on two tax incentives, hyper-amortisation and super-amortisation. In 2020 these instruments have been replaced by a tax credit for investments in new capital assets, both tangible and intangible (including the costs of services required for using those assets).

For tangible assets the tax credit is 40% for total investments of up to 2.5 million euros, and 20% for investments of between 2.5 million and 10 million euros. For intangible assets the tax credit is reduced to 15% of the cost, up to a maximum cost limit of 700,000 euros. For investments in leasing the tax credit is calculated based on the cost incurred by the lessor in purchasing the asset. For tangible assets that qualified for super-amortisation (“Other assets”) the tax credit entitlement is 6% of the cost up to a maximum cost limit of 2 million euros.