If you have purchased land or an agricultural business, this guide will help you evaluate the interesting opportunity of making the purchase as a professional agricultural entrepreneur (I.A.P.), thus benefiting from advantageous tax and financial benefits.
I.A.P: QUALIFICATION
Legislative Decree 29 March 2004, n. 99 introduced the new figure of the professional agricultural entrepreneur (abbreviated I.A.P.), a figure in possession of professional knowledge and skills, who dedicates themself to agricultural activities (referred to in article 2135 of the civil code), directly or as a member of company, at least 50% of their overall working time and who derives at least 50% of their overall income from work from the same activities, with the exclusion of pensions, allowances equivalent to them and allowances of any other nature.
I.A.P. AND REQUIREMENTS BY LAW
The law requires the I.A.P. the possession of adequate knowledge and skills in the agricultural sector, as well as specific income requirements.
First, regarding adequate professional knowledge and skills, these are proven by the possession of a qualification such as the diploma of an Agricultural Technical Institute or a professional one with an agricultural focus, a degree in Agricultural or Forestry Sciences, in Veterinary Medicine, in Food Technology Science or a University diploma in the same areas.
As an alternative to the qualification, you may have attended, by passing the relevant exam, a professional training course in agriculture with the issuing of a final certificate, provided that its duration is no less than that required by the reference region. In many Italian regions, the final exam can be replaced by an internship to be carried out at an agricultural company.
In the absence of certificates of attendance at training courses or university or secondary school diplomas, it is sufficient to have carried out agricultural activity as owner, co-owner, family worker, administrator or agricultural worker for at least three consecutive years, prior to the presentation of the application for recognition.
As for the income requirements, the I.A.P. tax return must show an overall income of which, at least 50%, derives from the agricultural activities described above.
If these are carried out in disadvantaged areas, as defined in the article 17 EC Regulation 1257/1999, the share of income deriving from agricultural activity must be at least 25% compared to any remaining share of income produced by the I.A.P. In calculating the percentage of taxable income declared for tax purposes, reference must be made to the latest tax return presented with the Income Form PF, 730, however excluding from the calculation what is already indicated in the previous NOTE.
The same proportion of 50% and 25% can also be extended to the processing times and activities dedicated to agricultural activity.
I.A.P. AND SOCIETY
To encourage corporate development in agriculture, Legislative Decree 99/2004 has provided for the recognition of the I.A.P. STATUS also to companies, overcoming the previous legislation which limited the qualification only to natural persons. In addition to the requirements already mentioned, for the company to also acquire the qualification of I.A.P. the following subjective requirements are foreseen:
- PERSONAL COMPANY: At least one partner must have the qualification of I.A.P.
- LIMITED PARTNERSHIP: The qualification refers to general partners.
- COOPERATIVE COMPANIES: In addition to production cooperatives, these also include management cooperatives, if at least 1/5 of the members have the qualification of I.A.P.
- CAPITAL COMPANY: The qualification must be possessed by at least one director. We remind you that in joint-stock companies the role of director can also be held by a non-shareholder.
ALLOCATION OF THE I.A.P. QUALIFICATION TO MEMBERS (Legislative Decree no. 101/2005-Circ. 48/2006)
In the case of partnerships and cooperatives, including business partnerships, the activity carried out by the members, in the presence of legal requirements, is suitable for them to acquire the qualification of professional agricultural entrepreneurs.
- PERSONAL COMPANIES AND COOPERATIVES: The qualification can be acquired not only in relation to individual entrepreneurial activity, but also in relation to activities carried out as a member provided the requirements are met. In cooperatives, recognition also occurs for worker members as long as, upon joining, the member establishes the type of working relationship from which the classification will derive.
- CAPITAL COMPANY – The qualification is acquired by the directors, who must no longer be registered in the INPS seperate management for the remunerations received by them, where they pay the INPS contribution as I.A.P.
The in-depth study on the I.A.P. discipline continues with the second part of this guide:
Professional Agricultural Entrepreneur: the benefits provided by law
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