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New Rules For Tax Losses Carried Forward

A new law decree has modified the regime of tax losses. Under the previous rules, tax losses could be carried forward for five years and could be utilised to offset 100% of taxable income of next FYs. For losses generated in the first three FYs of a business activity, the carry forward was with no time limit. Taxand Italy looks at the changes in the new rules.According to the new law, starting from FY2011:

  • tax losses can be carried forward without any time limitation
  • tax losses carried forward can be utilised to offset up to 80% of the taxable income of next FYs (from FY2011 onwards), until the full absorption of tax losses
  • tax losses generated in the first three years from the beginning of the business activity can be utilised to offset the 100% of the taxable income of next FYs, until their full absorption.

 

Taxand's Take


The new rules appear to leave some uncertainty in respect of the regime applicable to tax losses generated in FYs prior to 2011.

Your Taxand contacts for further queries are:
Guido Arie Petraroli
T. +39 02 7260591
E. gpetraroli@fantozzieassociati.it

Norberto Mariani
T. +39 02 7260591
E. nmariani@fantozzieassociati.it

Taxand's Take Author