The 2021 Government’s Annual Budget confirmed tax credit at 50% for listing costs on AIM Italia
The Italian Government has extended the benefits for SMEs introduced in 2018 and confirmed cost deduction related to consultancy for listing by allocating over 30 million Euro to continue supporting the economic system’s growth in 2021.
The floor-ceiling made available in the form of tax credit covers part of the listing costs for more than 60 new SMEs. This confirms the law maker’s readiness to support the growth of the financial market for small and medium enterprises.
In a period of great uncertainty and possible credit crunch, being able to enjoy a 50% discount on listing costs becomes a fundamental driver for companies’ expansion projects. Resorting to equity therefore becomes vital for those innovative SMEs that want to become more efficient and improve their competitive position.
AIM ITALIA’S NUMBERS IN 2020
Despite the hardships faced during the past year, the market has not stagnated, although it has not been able to replicate the performance of 2019, when 35 new companies were added.
In fact, there were 23 new listings in 2020, growing the AIM Italy segment with a total inflow of €115 million. The average flotation on the quotation was 26%. An interesting fact concerns coupons. The 19% of companies listed on AIM Italy distributed a total of 60 million euros dividends during 2020 (especially in the last part of the year), with an average payout ratio of 45% and a dividend yield of 2.6%.
WHO CAN ACCESS THE DEDUCTION AND IN WHAT TERMS?
The maximum limit of t tax abatement is 500,000 euros and is applicable to SMEs that meet the following requirements:
- Belonging to groups with less than 250 employees, revenues under 50 million and assets not exceeding 43 million euros
- Listing process started after January 1, 2018
The credit can be used for offsetting purposes and must be reported in the tax return for the period in which it accrues and in the subsequent ones until full use is made of it.
Beneficiary enterprises must be incorporated and officially registered in the Companies’ Register at the time of application, and must be in compliance with repayment measures of subsidies or incentives that have been declared illegitimate or revoked.
Services included are:
purposeful for the listing such as the implementation and adjustment of management control, assistance in drafting the business plan, support to the company in its various phases;
provided during the enrollment to place listed shares with investors;
aimed at supporting the issuer in the review of the historical or prospective financial report (including due diligence);
assisting the issuer in editing the admission document, prospectus or documents used for investor’s research purposes;
concerning legal, tax and contractual matters strictly related to the listing;
interviews, press releases, events and presentations to the financial community.
WHAT BENEFITS ARE THERE FOR INVESTORS?
The Revenue Agency has also confirmed through a special memorandum the retention of tax benefits for those who invest in innovative SMEs listed on AIM Italy. The personal income tax (IRPEF) deduction is 50% of the purchase of capital goods. It is valid up to 300 thousand euros per year of investment, beyond that figure the ordinary 30% will be applied. This is a significant fiscal resource for stockholders.
In fact, AIM Observatory notes that the average professional investment on AIM Italy is 300 thousand euros. These are key assets for businesses that want to implement research and development. For investing companies the 30% of corporate income tax (IRES) deduction remains for a maximum annual amount of 1.8 million euros.
This resolution was not taken lightly, but provides further confirmation of the trend that sees strong expansion of small and medium enterprises market, thereby reinforcing the commitment to support this segment.
Signals are certain: the cultural change underway must lead companies to evaluate and explore new channels of capitalization, taking advantage of the benefits that the Government provides by pursuing the path of alternative finance.
If you would like to receive more information about the listing process on AIM Italy, the opportunities that this can offer to your company and the related costs, you are welcome to contact us to arrange a meeting.