Italy's Revenue Agency ruled that companies undergoing liquidation, demerger, or reorganisation under Law No. 178/2020 do not automatically lose their Transition 4.0 tax credit, provided operations continue and machinery interconnection delays are properly documented.
Italy’s Revenue Agency has issued Response no. 139 on 10 July 2026, confirming that companies undergoing severe corporate restructuring do not automatically forfeit their Transition 4.0 tax credits.
The ruling emphasises that the true deciding factor is the economic substance of the operation; as long as the company maintains its business continuity and the investments continue to support production, the financial incentives remain valid.
How business continuity protects tax incentives
This clarification stems from a complex case involving a family-run enterprise that purchased Industry 4.0 machinery between 2021 and 2022. Following internal conflicts, the business hit a management deadlock, leading the Court to mandate its dissolution and liquidation in 2022. Fortunately, the company never ceased its operations, and by February 2023, the liquidation order was successfully revoked following an agreement to lease the business units and pursue a corporate demerger.
The regulatory framework for these incentives is defined in Article 1, paragraphs 1051 to 1063, of Law No. 178/2020 (the 2021 Budget), which overhauled the previous system established by Law No. 160/2019.
While Article 1, paragraph 1052 strictly states that companies in voluntary liquidation or bankruptcy lose access to these benefits, the Revenue Agency clarified the spirit of this law. Backed by previous rulings—namely Circular No. 9/2021, Response No. 719/2021, and Circular No. 1/2025—the Agency confirmed that procedures designed to rescue and continue a business do not invalidate the 4.0 tax credit.
The goal of the legislation is only to disqualify companies that are permanently shutting down.
Rules for delayed IT interconnection
The Revenue Agency also addressed the strict timelines regarding equipment deployment. Because of the family business’s extensive reorganisation, machinery operational from 2021 and 2022 was not officially interconnected to the company’s IT network until 2025.
Under Article 1, paragraph 1059 of the 2021 Budget, and supported by Circulars Nos. 4/2017 and 9/2021, a business can apply the standard credit rate starting the year the asset becomes operational. However, the increased Transition 4.0 rate can only be claimed once the IT interconnection is complete.
Citing Response No. 34/2024, the Agency noted that delayed interconnections spanning months or years are perfectly legal, provided the business can supply objective technical, organisational, or IT documentation explaining the delay. Postponing the connection for purely arbitrary or strategic reasons is strictly prohibited.
Retaining credits during demergers, spin-offs
The ruling offered vital guidance on how tax credits are treated during extraordinary corporate events, such as business spin-offs. Drawing on the precedents set by Circulars Nos. 9/2021 and 8/2019, the Administration reiterated that when a specific business unit is transferred, the associated tax credits follow the eligible assets to the newly formed company. This ensures the investment continues to serve its intended economic purpose within an active production environment, preserving the legal integrity of the tax benefit.
