The government recently published Decree-Law 18/2020, the so-called 'Heal Italy' decree-law, which entered into force immediately. Article 55 of the decree-law entitles companies (not only banks and financial institutions, but also industrial and commercial companies) willing to dispose of non-performing loan portfolios and unlikely-to-pay exposures by 31 December 2020 to claim a conversion of deferred tax assets into tax credits, thus increasing their cash flow during this period.
Italy recently implemented the recommendations set out in the Organisation for Economic Cooperation and Development's Additional Guidance on the Attribution of Profits to Permanent Establishments regarding the definition of a 'permanent establishment'. Article 162 of the Income Tax Code now includes a negative list of activities that do not constitute a permanent establishment, the anti-fragmentation rule and details of the requirements that give rise to a permanent establishment.
Articles 1(145) and (146) of Law 208/2015 provide that the parent company of a multinational group resident in Italy must file a country-by-country report with the tax authorities within the specified time limit. The secondary legislation enacted by the Ministry of Finance's February 2017 decree-law provides further details on country-by-country reporting requirements and application rules, considering Organisation for Economic Cooperation and Development recommendations and EU Directive 2016/881/EU.
The government's report on the 2008 Budget includes significant changes to the tax system, particularly with respect to corporate income tax and regional income tax. This update reviews the new provisions in these and other areas, including interest expenses, tax consolidation and accounting standards.