Step-Up Regime

  • Article 110 of Law Decree 104/2020 introduced the possibility for Italian GAAP companies to step-up in the 2020 financial statements the values of tangible and intangible fixed assets as well as participations, provided that the mentioned assets are included in the 2019 financial statements.
  • The step-up can be executed only for accounting purposes or also for tax purposes, in the latter case a 3% substitute tax is due.
  • Higher tax values are recognised for amortisation/depreciation purposes starting from fiscal year 2021, while for capital gain/loss purposes from fiscal year 2024.

Realignment Regime

  • Article 110 of Law Decree 104/2020 introduced also the possibility for both Italian GAAP and IAS/IFRS companies to realign the tax value of tangible and intangible fixed assets (including goodwill) as well as participations included in the 2019 financial statements to their higher accounting value.
  • A 3% substitute tax is due on the difference between the accounting value and the tax value of the mentioned assets.
  • Higher tax values are recognised for amortisation/depreciation purposes starting from fiscal year 2021, while for capital gain/loss purposes from fiscal year 2024
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