Today the Director General of Confindustria, Francesca Mariotti, spoke at a hearing at the VI Finance and Treasury Commission of the Senate of the Republic on the cognitive investigation on tax incentive instruments with particular reference to tax credits.

Fiscal instruments are an integral part of the economic and development policyin Italy as in most OECD countries. Among them, the tax credit, whose automatic application mode generally responds to the needs of companies, it is a support instrument that over the years has assumed a predominant role among the various 'levers' for company competitiveness, such as, for example, innovation, investment, dimensional growth.

The tax credit, from a tax instrument in the strict sense, has also become a industrial policy instrument to support business investments and cope with the difficulties related to the pandemic and the energy crisis. One the 'main' instrument of incentive policies because:

• È automatic and this minimises the concession time;
• in some cases made it possible to cope quickly with the temporary lack of resources in the production system;
• the simplified modalities for the horizontal offsetting of tax credits with debts of a different nature have contributed to a reducing the tax wedge on labour;
• is a mechanism that is also relevant with regard to social security debts;
• also makes it possible to finance research carried out by companies in each subject area, favouring an increase in the quality and general competitiveness of products, processes and services;
• represents a transparent tool, which allows the tax administration a real-time monitoring the amount of benefits granted and used;
• the application modes of tax credits, which essentially repeat themselves, are now familiar to taxpayers who use them with some familiarity.

However, there is no shortage of critical issues and possible courses of action.

1. First, borrowing a tax instrument for broader purposes requires the necessary involvement of different skills, professionalism, and administrations. It would therefore be technical expertise should be identified and put in place to support the administrations in charge of managing and controlling tax credits.
2. L'multidisciplinary approach must already exist in the Official Journal with the application framework, the rules properly instructed, implemented and monitored, with an approach involving the various PA actors and with clear and defined competences.

There was no shortage of cases of virtual' facilities only enunciated in legislative measures without the relevant implementing provisions and interpretative clarifications having been issued in a timely manner by the competent administrations. The the risk is to allocate resources to cover facilities that cannot actually be used by companies, thus crowding out companies' investment planning. (e.g. as for the tax credit training 4.0). Therefore, right from the establishment phase, one should emphasise the synergies between administration and citizens/businesses with a discussion also with trade associations which can play a decisive role in verifying the effectiveness of certain measures and in planning any corrective actions, together with a reasoned reflection on corrective measures and future prospects.

These measures should be financed on a multiannual basisguaranteeing these instruments a medium-term time horizon that facilitates investment planning by companies.

3. This comparison between administrations must, then, persist over timeguiding the interpretation phase of a measure and also assisting in the 'pathological' phase of the tax relationship (i.e. assessment, litigation).

The high extra-tax technicalities that characterise many tax credits make it is also necessary to consolidate forms of confrontation between taxpayers and administrations other than the Inland Revenue Agency, by means of requests for opinions with certain response times or forms of prior certification. For example, it is unthinkable that, more than 25 years after the introduction of the rule that ensures the offsetting of tax credits with debts of a different nature, individual Administrations, even in contrast to their previous practices, should raise doubts as to the existence of this right.

To put an end to jurisprudential uncertainties on the subject it is necessary for the Government to give an immediate answer to parliamentary question 5-07493 of 22 April 2022 in order to affirm the full right of taxpayers to offset tax credits against social security debts. Any coordination problems that may exist between INPS, Agenzia delle Entrate and Ragioneria dello Stato cannot call into question a right of taxpayers enshrined in law.

4. Over the past few years, the Inland Revenue has made a commendable interpretative effort, with a proliferation of responses to appeals and FAQs.

Among the useful tools are the public consultations involving the possibility of anticipating possible application doubts on the legislation in question, through comments from taxpayers, the business world, trade associations and professionals.

5. The peculiarities of tax credits with facilitation purposes should, moreover, also be adequately taken into account when dealing with sanctions, particularly at the administrative level.

For a long time, Confindustria calls for a regulatory intervention that would allow a better declination of the concept of 'non-existence' of creditIt safeguards those cases of errors of assessment, especially in the presence of complex technicalities of the rules or interpretations that are not unambiguous and homogeneous over time. The tax reform will provide an opportunity to intervene on this aspect as well, in full compliance with the principles of fairness and proportionality, which the penalty system must be guided by.

6. Another central theme is that of resourcesSome of the facilitation schemes introduced in recent years have shown an underestimation of allocations compared to the use made by the potential beneficiary.

Therefore, the prior and subsequent impact assessments, to ensure the effectiveness of incentives and facilities - and to evaluate their continuation, redirection or termination - as well as in itinere and ex post evaluations on the results achieved, with regard to both public finance and economic growth profiles.

7. A careful evaluation plan can also prevent inauspicious subsequent reconsiderations of rules already enacted and incentives already fully operational. An example are the building bonuses: delete tout court - and without reasonable transitional space - the alternative forms of use to deductions undermined the reliance, the planning capacity, the investment space of all operators involved. It is now it is essential to design a new medium- to long-term strategy that leverages the resources, both in terms of capital and expertise, of the entire real estate investment chain, establishing support measures providing for rates that give price signals to the market and at the same time mechanisms for invoice discounting and credit assignment to allow the widest possible take-up especially for the less financially able.
8. However, there is no shortage of calls for action from the international context. In this regard, special attention deserves theImplementation of the Global Minimum Tax Directivepublished last December, which must be implemented by the Member States by 2023 in order to enter into force in 2024.This in turn transposes the work of the OECD within the so-called 'Pillar Two' of global tax reform. The Directive aims to ensure a global minimum level of effective taxation (equal to 15%) for multinational enterprise groups and large-scale domestic groups in the European Union with a consolidated turnover of at least EUR 750 million. E, for determining the effective level of taxation in a given country, Tax benefits will play a key role.

9. La tax delegation also mentions, among other issues, the need to revise the benefits. On this path it will be, in our opinion, essential to concentrate the (few) available public resources on measures aimed at supporting growth and guiding economic and social choices, as well as attracting new investment to Italy.

Dto understand what the role of these incentives will be in the new dual-rate IRES structure that the delegation envisages.

The implementation of the tax reform proxy will provide a valuable opportunity to systematise the set of tax benefits that has been consolidated over time.

It would also be desirable to rationalise the many facilitative instruments established in the field of circular economy.

Businesses are ready, also through their trade associations, to make an active contribution to this great work of systematising and rewriting the tax system.