Substitute tax, the revenue measure to avoid double deduction

Substitute tax, the revenue measure to avoid double deduction
Substitute tax, the revenue measure to avoid double deduction

Substitutive tax, the rules for the redemption of the values ​​relating to goodwill, trademarks and other intangible assets.

To intervene is the provision of the Revenue Agency of 30 November 2021 which establishes the methods of implementation of the provisions of the Budget Law 2014 and modified by Budget Law 2018.

The provision relating to the option for the substitute tax regime has as its goal, among others, that of avoid phenomena of double tax deduction.

The possibility is foreseen for the corporation, the partnership they commercial entities, who have entered a controlling interest in the individual financial statements as a result of an extraordinary or translation operation.

The condition that one has been entered in the consolidated financial statements must be respected item by way of goodwill, trademarks and other intangible assets.

Substitute tax, the revenue measure to avoid double deduction

L’substitutive tax is at the center of the provision of the Revenue Agency of 30 November 2021.

The document of practice establishes the procedures for implementing the rules relating to the rules forfreeing of values relating to goodwill, trademarks and other intangible assets.

Revenue Agency – Provision of 30 November 2021
Methods of implementation of paragraphs 150 and 151 of article 1 of law no. 147, following the changes introduced by article 1, paragraphs 81 and 82, of law no. 205.

The provisions on the subsidized regime are contained in paragraphs 150 and 151 of article 1 of law no. 147, or the 2014 Budget Law.

The 2018 Budget Law, with paragraphs 81 and 82 of article 1 of law no. 205.

The substitute tax regime is reserved for corporations, partnerships and commercial entities, who have entered a controlling interest in the individual financial statements as a result of an extraordinary or translation operation.

The requirement to be respected consists in the fact that one has been entered in the consolidated financial statements, following one of these hypotheses goodwill item, trademarks and other intangible assets.

The postage regime “repeal” was extended from the 2018 Budget Law to controlling interests in non-resident companies even without a permanent establishment.

The provision allows for the tax recognition of majors values ​​of controlling shareholdings, which result from extraordinary transactions and are attributed in the consolidated financial statements to:

  • goodwill;
  • trademarks;
  • other intangible assets.

In such cases, the payment of asubstitutive tax with rate at 16 per cent. The tax must be paid in a single installment by the deadline for the balance of taxes due for the tax period in which the transaction takes effect.

The recent provision of the Revenue Agency, on the subject in question, has as its purpose that of avoid phenomena of double tax deduction.

Substitute tax, what the provision of the Revenue Agency provides

The new provision of the Revenue Agency replaces the directorial provision of last June 6, 2014.

Various aspects are regulated in the document of practice, including:

  • the scope of the option for thesubstitutive tax;
  • the tax base;
  • l’time span.

The goal is to avoid the phenomena of double tax deduction of the values ​​of intangible assets subject to realignment.

In fact, the rules for the option are established in the case of deduction of the stamped value of goodwill and trademarks and in the case of transfer to the territory of the State of residence for the purposes of income tax of the business owner referring to non-resident companies.

Clarifications are also provided on the correct indication in the appropriate statement of the tax return.

Exercising the option for other realignment of tax and accounting values it prevents the choice of the substitute tax regime, with reference to the same goodwill values, trademarks and other intangible assets.

The provision enforces the current legislation. In particular, the provisions of the Budget Law 2018 on transactions carried out starting from the tax period preceding that of the entry into force of the law.

Also for the items relating to goodwill for trademarks and other intangible assets recognized in the consolidated financial statements, for transactions not referring to a permanent establishment located in the territory of the State of a non-resident subject, the rule in question can be applied.

On the one hand, in fact, the possibility, upon payment of the substitute tax, is extended to free all or part of the values ​​relating to goodwill, trademarks and other intangible assets.

This possibility also includes the hypothesis in which the values ​​are not related to one permanent establishment in Italy of a non-resident person.

On the other hand, the possibility of opting for the regime is precluded, with reference to the values ​​relating to goodwill, trademarks and other intangible assets already subject to the options for realignment schemes provided for by articles 172, paragraph 10-bis, 173, paragraph 15-bis, and 176, paragraph 2-ter, of the Tuir, and article 15, paragraphs 10, 11 and 12, of Legislative Decree no. 185/2008.

Per avoid phenomena of double tax deduction, the prohibition must also include the deduction of amortization relating to the fiscal values ​​of intangible assets assumed for the purposes of income tax and IRAP by those who transfer their headquarters to the territory of the State also for the outcome of extraordinary operations.

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