Law no. 126 of 13 October 2020 introduced a revaluation of corporate assets, providing for the possibility for companies to proceed with the revaluation of tangible assets, legally protected intangible assets (trademarks and patents) and of the participations resulting from the financial statements financial year in progress as at 31 December 2019 to realign the book value of these assets to their market value.
This revaluation, to be carried out in the 2020 financial statements, can be carried out solely for the purposes of the statutory financial statements, without payment of any substitute tax, or even for tax purposes with the payment of a substitute tax of 3% on the value of the revaluation to be pay in a maximum of three annual installments.
In the first case, the revaluation of the value assigned to the asset causes an increase in the equity shown in the financial statements, but the depreciation on the amount of the revaluation is not tax deductible. The amount of the revaluation becomes a net equity reserve that can be used to cover any losses, but which cannot be distributed to shareholders by paying a substitute tax of 10%.
In the second case, however, the amount of the revaluation becomes part of the residual value of the asset to be depreciated both for statutory purposes and for tax purposes by applying the depreciation tax rate provided for that asset and the equity reserve can be distributed to shareholders by paying a substitute tax of 10%.
Therefore, the capital gain from asset revaluation can be distributed by paying on the same total taxes of 13% (3 + 10), instead of the overall rate of the two corporate taxes equal to 27.9% (IRES 24% + IRAP 3.9%) . In addition, in subsequent years it is possible to amortize the amount of the capital gain by deducting the depreciation rates from taxable income. Both substitute taxes can be paid in a single installment or in three annual installments.
The only constraint to enjoy this tax advantage is that the revalued assets cannot be sold before the end of the third tax period following the one in which the revaluation was carried out and that the decision to pay the substitute tax or not to distribute in the future, the revaluation reserve must be taken immediately
It follows that carrying out the asset revaluation can be very convenient.