Ultra-broadband gets Italian super-depreciation boost

By:
Bill Boyle
Published on:

Italian telecoms companies which invest in the ultra-broadband network could take advantage of a mooted Italian “super-depreciation” tax-shield

The tax-shield was announced by economic development Minister Carlo Calenda in an interview with Italian newspaper Il Sole 24.

This is the so-called Industria 4.0 which may be inserted into the 2017 budget. The plan highlights the need to bring high-speed internet to ‘gray areas’ where only one internet provider can operate but where the state is not permitted to intervene directly.

Almost 65% of Italian companies are thought to exist in these areas and their business may be in danger in the absence of an adequate infrastructure. The problem has resulted in talks between the Italian government and Brussels, which, in recent months, is coming round to the idea of vouchers for users to activate high-speed connections.

“The problem with the one tool that the Commission will allow,” said Calenda, “is that not everything can be solved with a voucher since they only cover the entity that made the request. We are trying to figure out how to proceed to incentivize offerings, meaning investments by operators in the sector in these gray areas. One analysis we’re working on but haven’t yet finished is to consider a “super-depreciation” for part of this investment: it would really speed up both the process and the cost within a very short timeframe. Brussels is currently considering the idea.” 

The “super-depreciation,” which is set for inclusion in the budget, would allow a 250% depreciation for capital equipment. It’s a higher-wattage version of the similarly large ‘140% depreciation’ introduced in last year’s budget.

One idea is that fiber optics be included in the kinds of equipment allowed for the purposes of depreciation while other kinds of cables are excluded.

This bonus for ultra-broadband would be financed as fiscal incentives for a total of €13 billion through 2020 (of which about €8.4 billion are for the “super-depreciation” while another €3 million will go to tax credits for research).