Italy’s 2027 cloud tax credit: what the draft Budget Law says

Italy’s draft Budget Law for 2027 includes a tax credit of up to 30% on cloud subscription fees paid in 2027, 2028 and 2029. It is Article 12 of the bill presented to the Chamber of Deputies on 30 October 2026 (A.C. 3174). It applies to Italian companies and to the Italian permanent establishments of foreign companies. The bill is still going through Parliament and the measure is capped at 30 million euros a year, so it is worth reading what it actually says before putting it in a 2027 budget.

Checked against the bill filed with the Italian Chamber of Deputies. Updated 9 November 2026.

What Article 12 of the draft 2027 Budget Law says

Bill A.C. 3174 was presented by the Italian Minister of Economy and Finance on 30 October 2026. Article 12 introduces a “contribution, in the form of a tax credit, for subscription fees for cloud computing services and solutions relating to the use of intangible capital goods”.

On 4 November 2026 the President of the Chamber split a few provisions off the bill (Articles 69(8), 105 and 115). The text now before the Budget Committee is A.C. 3174-bis. Article 12 was not among the provisions removed.

Who can claim it

Paragraph 1 grants the credit to companies resident in Italy and to Italian permanent establishments of non-resident entities. The text sets no size or turnover threshold. A foreign group running its Italian operations through a branch that qualifies as a permanent establishment is therefore in scope, on the same terms as an Italian SME.

Which subscriptions qualify

Not every cloud subscription. The credit covers fees for cloud services “relating to the use of intangible capital goods” listed in Annex F to the Italian income tax code (Legislative Decree no. 117 of 19 June 2026). The technical report to the bill refers to “advanced” intangible capital goods.

In practice, a subscription to an ERP or another business platform will only qualify if the software matches an item on that list. The implementing decree will set out what evidence is needed and how the match is demonstrated.

How much it is worth and how it is used

The credit is at most 30% of the costs accrued in each of 2027, 2028 and 2029. The bill says “not exceeding 30 per cent”: 30% is a ceiling, not a guaranteed rate.

Under paragraph 2 the credit is not taxable for income tax or IRAP, the Italian regional business tax. It can be combined with other incentives on the same costs, provided the total does not exceed the cost incurred. Paragraph 3 allows it to be used only to offset tax payments, without the 2 million euro annual offset cap and without the 250,000 euro cap that normally applies to credits reported in section RU of the tax return.

Paragraph 4 leaves the details to a decree of the Minister of Enterprises and Made in Italy (MIMIT), agreed with the Minister of Economy and Finance. It must be adopted within 60 days of the law entering into force and set the criteria and the award procedures that keep spending within the annual cap.

Why it exists: SaaS is outside Italy’s hyper-depreciation scheme

Italy’s 2026 hyper-depreciation scheme (iperammortamento) increases the deductible cost of new capital goods, software included, but it works on depreciation and finance leases. A SaaS subscription is a service cost with nothing to depreciate, so it is left out. Article 12 covers that spending with a different tool: a credit used against tax payments, tied to each year’s fees.

The 30 million euro annual cap

The bill’s technical report quotes a figure from the Ministry of Enterprises: investment in eligible intangible goods delivered through cloud services is worth about 94 million euros for 2026. On that basis the Government considers a credit of up to 30% with a 30 million euro annual cap to be adequate.

30% of 94 million is about 28 million, so the cap is sized on current spending. If claims grow, the effective rate could fall below 30%, and the decree will have to decide how funds are allocated. This is our reading of the figures in the technical report, not an official forecast.

What companies operating in Italy can do now

1. List your software subscriptions. ERP, CRM, production and logistics platforms, AI tools: for each one, the annual cost and the period it relates to.
2. Separate subscriptions from purchases. Purchased licences and capitalised custom software belong in the hyper-depreciation assessment; cloud fees, if the bill passes, in the new credit.
3. Ask for clear contracts and invoices. A precise description of the service and of what the software does will help with any check against the list.
4. Do not count on the credit in your 2027 budget yet. Until the law and the decree are published, the amount and the procedure can change.
5. Talk to your Italian tax adviser. Combining incentives, cost accrual and offsetting depend on your tax position, especially for a permanent establishment.

Check with your tax adviser. This article describes a bill, not a law in force. It is not tax advice and does not guarantee access to the incentive.

Cloud or self-hosted ERP: the incentive alone should not decide

With hyper-depreciation for purchased software and a possible credit for cloud fees, both routes may carry an incentive in 2027. The choice still depends on other things: integration with operations and other systems, data control, five-year costs and in-house skills.

An ERP system such as Odoo can be used as an online subscription or installed on a dedicated server; in the second case managed cloud infrastructure in the EU takes server management off your hands. If you are planning to move on-premise systems to the cloud, our cloud migration guide for SMEs explains where to start, and our Odoo guide for Italian SMEs covers the Italian localisation.

Frequently asked questions

Is the Italian cloud tax credit already in force?

No. It is part of the draft 2027 Budget Law that Parliament is examining. After approval, a MIMIT-MEF decree is also needed, due within 60 days of the law entering into force.

Can a foreign company claim it?

Only through an Italian permanent establishment, which paragraph 1 expressly includes among the beneficiaries. A foreign company with no permanent establishment in Italy is not covered by the text.

How much is it worth in practice?

At most 30% of eligible fees. On a 10,000 euro annual subscription the credit is at most 3,000 euros, provided the software is on the list and the annual funds cover all claims.

Written by. The UreTech team: developers and consultants who design and integrate ERP systems, custom software, automation and managed cloud for SMEs. About us.