Preferential taxation for company income on the sale of goods

The Revenue Agency, implementing the 2016 stability law (law 208/2015), has recently issued a circular (n.26/E of 1 June 2016) for the introduction of a substitute tax on company income in cases of assignment and transfer to members of immovable property and movable property registered in public registers.

The substitute tax for income taxes and IRAP is equal to 8% and must be applied on a taxable base determined on the difference between the normal value of the assigned asset and its fiscally recognized cost.

Therefore, the consideration for the transfer will not contribute to forming the taxable base for the purposes of applying IRES, but is subject to a fixed tax rate of 8%.

However, the relief does not apply to all types of companies; only certain types of company forms are included in the new regime, including general partnerships, limited partnerships, limited liability companies, joint stock companies and limited partnerships by shares which within 30 September 2016 which assign or transfer real estate to members - with the exception of properties used exclusively for the exercise of art or profession or commercial enterprise (art. 43, paragraph 2, first sentence of the consolidated income tax text) - or movable assets registered in public registers not used as instrumental assets in the company's own activity.

The new regime can only be applied if the members are registered in the members' register as of 30 September 2015, or have been registered in the appropriate register within thirty days from the date of entry into force of the Stability Law (01.01.2016), by virtue of a transfer title with a certain date prior to 1 October 2015. The rationale of the provision is to prevent subjects previously unrelated to the shareholding from entering it close to the assignment or transfer deed, thus benefiting from the benefits .

These provisions are also extended to companies whose exclusive or main object is the management of the aforementioned registered immovable and movable assets, which are transformed into simple companies, provided that this transformation takes place by 30 September of the current year. In this case the substitute tax will be applied on the difference between the nominal value of the goods owned at the time of the transformation and their fiscally recognized cost.

Companies that make use of the preferential taxation will have to pay 60% of the substitute tax by 30 November 2016 and the remaining part by 16 June 2017, with the criteria set out in the legislative decree of 9 July 1997, n. 241.

The Revenue clarifies that an omitted, insufficient or late payment of the tax will not hinder the completion of the express option.

Milano, June 10th 2016.

Avv. Giovanni Babino