Weekly tax updates 03-05-21

Tax Thursday: Italy update: Opportunities For Revaluation Of Tangible And Intangibles Assets – Regulatory Changes

The regulatory changes recently occurred in Italy, to support the business entities in respect of crisis impacts, include, within others:

  • The Italian “August Decree Law” significantly improved the existing terms for the revaluation of assets, reducing the “Substitute tax” to 3% (previously 12% – 10%) and also giving the faculty to opt for an accounting revaluation only, in a “tax continuity” regime (no taxation on the revaluation balance);
  • The 2021 Italian Budget Law also introduced the “fiscal realignment” regime, allowing to pay the “Substitute tax” of 3% on any difference between accounting values and tax values (typically: goodwill and other assets recorded in mergers and similar);
  • The existing discipline on the treatment of the revaluation reserves remains confirmed, in particular the faculty to opt for a “Substitute tax” of 10% to “free” the distribution of the revaluation reserve.

The revaluation potential for “tangible” goods is relatively limited (except in special cases) whilst a greater potential exists on “intangibles” (trademarks, IP, software, rights and, to a lesser extent, know-how), as they can be re-evaluated based on future “excess income” forecasts.


  • The opportunity for companies is therefore attractive especially when:
  • a) the “expectations” of future profits and the revaluation potential (in particular: intangible assets) are larger and
  • b) the need to distribute revaluation reserves in the short-medium term decreases (thus avoiding the need to pay 10% to “free” the revaluation reserve).
  • Please note that: The revaluation must be entered into the 2020 financial statements. However, the Italian special Covid legislation introduced the faculty to postpone the approval of the accounts at the end of June.


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