Article 110 of Law Decree no. 104/2020 (so called “Decreto Agosto”) introduced a special regulation to opt for the accounting and tax step up of the values of tangible, intangible and financial assets in the Financial Statements as at 31st December 2020. It is possible to step up assets also for mere statutory purposes and thus without any obligation in term of substitute tax on the higher amounts posted in the Balance Sheet. Alternatively, should a company wish the higher values be recognised for tax purposes, a 3% substitute tax will be due.

Depreciations on the stepped up amounts will be deductible starting from the FY subsequent to the one in which the revaluation was carried out.

It is possible to opt for a further tax benefit connected with the distribution of the revaluation reserve (positive revaluation balance) by paying a 10% substitute tax.

Both substitute taxes will not affect the P&L and could be paid in a single or three yearly equal installments.

The tax effects of the step up are frozen in case of transfer of the revalued asset: the stepped up value will be recognized for determining the capital gain only starting from the fourth FY following the one in whose Financial Statements the revaluation was carried out.

Basically: the higher the value that is stepped up, the quicker the depreciation period, the bigger the benefits.

We believe the peculiar features of this law provision, paired with the unprecedented circumstances in which we are, suggest to carefully evaluate these options, which may give rise to massive unrepeatable benefits.

Once we have your consent through a form located at the bottom of this page, our firm is pleased to offer the possibility to receive preliminary assistance to calculate the tax benefit. Moreover, our firm can provide expert consultancy relating to the evaluation, planning, and perfecting of the project.

Gabriele Labombarda
Partner - IBC Director for Italy
Gabriele Labombarda