Transition 5.0: 5 billion in investment in two months

The long wait for the MIMIT-MEF implementing decree certainly meant that many investments that had been put on hold in the first part of the year were subsequently submitted when the application window opened. This has had a significant impact on the trend in domestic orders for machine tools, which, after falling by 30 per cent in the first half of the year, began to pick up pace again in June (see *Il Sole 24 Ore* of 8 August). The growth in the number of projects submitted to the GSE has been exponential, starting at €900 million after just five days and peaking in the final week – a timing that, for many consultants and business owners, likely coincided with the last week of work before the summer break.

These figures should be treated with caution. Firstly, the projects must be confirmed by means of an advance payment and then completed, with a corresponding notification of completion. In any case, they do not represent the cost to the Treasury but rather the investments on the basis of which companies, once all procedures have been correctly completed, will be able to benefit from hyper-depreciation – that is, a substantial tax deduction on the acquisition costs of assets, spread over a period of several years.

There is no spending cap, and the cost to the State is spread over the years in line with the depreciation periods of the assets. In short, there is no immediate depletion of resources – the ‘click day’ effect – which characterised the old Transition 4.0 scheme and subsequently the first version of 5.0, both of which were based on the use of automatic tax credits. Last year’s Budget Act did not, in fact, set a predetermined ceiling on resources, as had been the case with tax credits, but established a multi-year allocation (€9.8 billion, spread across the public finance budget until 2035) which is subject to monitoring by the Ministry of the Economy.

However, the technical report on the legislation introduced a year ago as part of the budget is very useful for understanding the current situation: against the €9.8 billion allocated, total investment by businesses over the plan’s implementation period (1 January 2026–30 September 2028) is estimated at around €30 billion. The current figure of 4.75 billion in investments represents, proportionally, the utilisation of funding amounting to approximately 1.5 billion euros. In just two months. Hence, even though – as mentioned – there is no cause for alarm regarding resources for those currently applying, there are potential considerations to be made in view of the Budget Bill. It was Minister Urso himself who, in mid-July, stated that ‘if it proves necessary to increase funding in the next budget, we will of course do so’.