Tax credit for the purchase of recycled materials

Advantages and support for corporate sustainability

by Marta Livia Galli

We continue our journey in presenting the advantages of sustainabilityThe advantages of sustainability for SMEsenvironmental sphere

The law 197 of 29 December 2022"premium" for companiesbiodegradable packagingtax credit equal to 36%

Objective of the measurement

The will of the Legislator in this case is clear: the promotion of the circular economycomplex production processes

It is not the first time that the Italian legislator has used this type of incentive: the tax credit was, in fact, established in 2018concrete advantage

What is included in the tax credit

There are mainly three purchasing objectives for companies that want to take advantage of a real tax credit on recycled plastic:

1. products made with materials deriving from the separate collection of packaging made up of plastic material
2. packaging, primary and non-primary, biodegradable and compostable
3. products deriving from the recycling of materials such as glass, paper and aluminium

   The products considered include paper or cardboard

   As already mentioned, the tax credit is equal to 36% of the expenses faced by the company, with a maximum amount of the credit€5 million

   How to obtain the 36% tax credit

   With regards to the methods of use, the 2023 Budget Law provides for the possibility of using the accrued credit exclusively as compensation through F241 January of the following year

   The sum thus accrued does not contribute to the formation of the income calculated for IRAP purposes

   This is one of the cases in which we offer our services in the context of Corporate Tax ConsultancyStrategic Consulting

   The ESG-oriented trend of the Italian legislator and the results obtained

   Wanting to broaden the scope of this comment, it is possible to identify a trend on the part of the Italian legislator in the field of sustainability, in line with what the other EU countries are doing, both individually and together, as well as with the global trend.

   The tax credit in question, in fact, foreseen in the budget already in 2019, continued to be renewed based on the results obtained. In the explanatory report to the bill that gave birth to the 2023 Budget Law, in fact, not only have the objectives set in previous years been achieved, the applications received are equal to approximately four times the resources allocated to the measure.

   This underlines two important data: (i) Italy has no second thoughts - after all, it couldn't - regarding the strategy of fighting climate changebusinesses prove to be reactive

   This initiative to valorise and recover materials deriving from plastic packaging, therefore, demonstrates the desire to pursue the 17 sustainability objectivesSustainable Development Goals

   Wanting to go into even more detail, the 36% tax credit for the purchase of recycled materials complies with the provisions of Objective n. 11

   The tax incentives included in the 2023 Budget Law are part of the numerous tools available to the Government to guarantee, on the one hand, the achievement of the objectives proposed by the UN and, on the other, the promotion of a different mentality

   As always, the work to be done towards sustainability is not of companies but of the entire country system is twofold: on the one hand the laws of the State and on the other people and companies that follow those laws. The objective, today more than ever, is the same for all of us.