“Energy and Gas” Tax Credits

Some legislative provisions have introduced relief measures to partially offset the higher cost borne by companies for the purchase of electricity and gas; they are summarized below:

ELECTRICITY

ENERGY-INTENSIVE COMPANIES

Companies that have an average consumption of electricity, calculated in the reference period, of at least 1 GWh/year and that meet one of the following requirements are qualified as energy-intensive (with high electricity consumption pursuant to the Italian Ministerial Decree of December 21st, 2017):

  • They operate in one of the sectors of Annex 3 of the EC Guidelines 200/01 of 2014;
  • They Operate in one of the sectors of Annex 5 of the EC 200/01 Guidelines and have a positive electricity intensity index greater than 20%;
  • They are not included in the first two points, but are included in the lists of energy-intensive companies drawn up by CSEA - Cassa per i Servizi Energetici e Ambientali (i.e. Fund for Energy and Environmental Services -) as per article 39 of the Italian Decree Law no. 83/2012 Levels of contribution to general system charges.

The following benefits have been introduced in favour of energy-intensive companies:

  • Tax credit equal to 20% for the 1st quarter of 2022 (pursuant to art. 15 of the Decree Law 4/2022) on the expenses incurred for the energy component purchased and used in the first quarter of 2022 in favour of companies whose costs per kWh calculated on the basis of the average of the fourth quarter of 2021 have undergone an increase in the cost per kWh greater than 30% related to the same period of 2019. 
  • Tax credit equal to 25% for the 2nd quarter of 2022 (pursuant to art. 4 of the Decree Law 17/2022 and art. 5 of the Decree Law 21/2022) on the expenses incurred for the energy component purchased and used in the second quarter of 2022 in favour of companies whose costs per kWh calculated on the basis of the average of the first quarter of 2022 and have undergone an increase in the cost per kWh greater than 30% related to the same period of 2019. The same bonus percentage is provided for costs related to electricity produced and self-consumed in the second quarter of 2022. In this case, the increase in the cost of electricity shall be calculated with reference to the change in the unit price of fuels purchased and used by the company for the production of the same electricity and the tax credit shall be determined with regard to the conventional price of electricity equal to the average, relating to the second quarter of 2022, of the single national price of electricity.

NON-ENERGY INTENSIVE COMPANIES

For companies that do not qualify as energy-intensive but are equipped with electricity meters with available power equal to or greater than 16.5 kW, the following tax relief has been recognized:

  • Tax credit equal to 12% for the 2nd quarter of 2022 (pursuant to art. 3 of the Decree Law 21/2022) on expenses incurred for the energy component purchased and used in the second quarter of 2022 in favor of companies, whose costs per kWh calculated on the basis of the average of the first quarter of 2022 have undergone an increase in the cost per kWh greater than 30% related to the same period of 2019.

GAS

GAS- INTENSIVE COMPANIES

For the purposes of these tax reliefs, companies operating in one of the sectors referred to under annex 1 of the Italian Ministerial Decree 541/2021, which have an average consumption of natural gas (not for thermoelectric uses), calculated for the reference period, not lower than 25% of the volume of natural gas indicated in article 3, paragraph 1, of the same decree (i.e. 1 GWh/year), qualify as gas- intensive companies (companies with a high consumption of natural gas).

The following tax relief has been introduced in favour of gas-intensive companies:

  • Tax credit equal to 20% for the 2nd quarter of 2022 (pursuant to art. 5 of the Decree Law 17/2022 and art. 5 of the Decree Law. 21/2022) on the expenses incurred for the natural gas component (not for thermoelectric uses) in the second quarter of 2022 in favour of companies that have undergone a significant increase, greater than 30%, in the reference price of natural gas, calculated as the average, referring to the first quarter of 2022, of the reference prices of the Infra-Daily Market (MI-GAS) published by the Manager of the Energy Markets (GME), compared to the first quarter of 2019.

NON-GAS INTENSIVE COMPANIES

For companies that do not qualify as gas-intensive, the following tax relief has been recognized:

  • Tax credit equal to 20% for the 2nd quarter of 2022 ((pursuant to article 4 of the Decree Law 21/2022) on the expenses incurred for the natural gas component in the second quarter of 2022 (not for thermoelectric uses), if the reference price of natural gas, calculated as the average, referring to the first quarter of 2022, of the reference prices of the Infra-Daily Market (MI-GAS) published by the Manager of the Energy Markets (GME), has undergone an increase of more than 30 percent of the corresponding average price referring to the same quarter of 2019.

HOW TO BENEFIT FROM TAX CREDITS

The characteristics for benefitting from tax credits are the following:

  • by offsetting in the F24 form, pursuant to article 17 of the Italian Legislative Decree 241/1997 by December 31st, 2022;
  • Option to transfer the credit in full pursuant to articles 3, 4 and 9 of the Decree Law no. 21/2022;
  • Disapplication of the general offsetting limits pursuant to article 1, paragraph 53, of Law no. 244 of December 24th, 2007, and article 34 of Law no. 388 dated December 23rd, 2000;
  • It does not contribute to the formation of the company's income nor of the taxable base of the regional tax on productive activities and is not relevant for the purposes of the ratio referred to in articles 61 and 109, paragraph 5, of the TUIR (i.e. Consolidated Law on Income Tax);
  • Accumulation with tax reliefs having as their object the same costs, provided that they do not exceed the cost incurred;
  • Possibility to offset at a time prior to the end of the reference quarter (FAQ of the Italian Tax Authorities dated April 11th, 2022).

 

Edited by Giusi Di Marco and Ercole Fano

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