The Transition 5.0 plan, introduced by the Italian government, offers a new tax credit for investments made in the 2024-2025 period, aimed at promoting the digital and energy transformation of companies towards more sustainable growth.
TRANSITION 5.0 PLAN: INCENTIVES AND CONDITIONS
With the entry into force of Decree-Law No. 19/2024, subsequently converted into Law No. 56 of April 29, 2024, the methods for accessing the new tax credit under the Transition 5.0 plan have been outlined.
The tax credit aims to support the green transition by encouraging investments in new capital goods, provided they generate energy savings of at least 3% on the company’s overall consumption or 5% on the specific process in which they are implemented.
Additionally, investments in renewable energy projects and staff training are also eligible for the incentives.
To benefit from the incentives, transactions must be concluded between January 1, 2024, and December 31, 2025.
The amount of the credit varies depending on the investment and the reduction in energy consumption, with a tax relief rate of up to 45% and provisions for additional increases for the installation of high-efficiency photovoltaic modules.
Companies facing certain factual situations, including financial distress or failure to comply with labor safety regulations and social security obligations, are excluded from the benefits of the Transition 5.0 plan.
Moreover, it is necessary to declare that the projects do not cause significant harm to other environmental objectives, in accordance with the “Do No Significant Harm” principle established by Article 17 of EU Regulation 2020/852.
To obtain the tax credit, certifications issued by an independent evaluator are required, attesting to the energy savings generated by the investment both before and after its implementation.
It is already possible to reserve the tax credit through the dedicated IT platform established by the GSE.
The tax credit can only be utilized as compensation, starting five days after the GSE’s official communication to the Revenue Agency, and must be used by December 31, 2025. Any unused amount by that date can be carried forward and used in five equal annual installments.
The tax credit:
- Does not contribute to the calculation of taxable income and does not affect IRAP;
- Is not subject to compensation limits;
- Cannot be transferred or sold.
The tax credit can be combined with other incentives covering the same costs, provided that this combination does not exceed the incurred cost. However, it cannot be combined with specific incentives such as the tax credit for investments in capital goods under the 4.0 plan or for investments in the Southern Italy Special Economic Zones (ZES).stimenti nella ZES del Mezzogiorno.
HOW CAN WE HELP YOU?
LEXIA is ready to assist companies in seizing all the opportunities offered by Transition 5.0, providing integrated consulting through the expertise of our ESG Advisory – Tax – Energy, Environment, and Infrastructure practice groups. We offer support in verifying eligibility for tax benefits, obtaining them, and initiating energy efficiency projects.
In addition, LEXIA has established partnerships with technical experts specialized in energy savings certifications, ensuring comprehensive assistance, allowing clients to rely on a single point of contact for all necessary bureaucratic requirements.
Our Transition 5.0 advisory desk is available at transizione5.0@lexia.it to assess investment projects and provide specialized support in obtaining the tax benefits offered by the Transition 5.0 plan.
