The aggregations bonus, reintroduced by art. 11 of Decree Law no. 34/19, is a benefit that concerns business combinations through extraordinary operations of merger, demerger and transfer of business carried out from May 1, 2019 to December 31, 2022.
Beneficiaries of this benefit are resident corporations (S.p.A., S.r.l., cooperative companies, mutual insurance companies, European companies and European cooperative companies) resulting from the extraordinary business operations, namely: (i) merging or merged entity; (ii) entity benefiting from the spin-off; (iii) transferee entity.
What to do to obtain the aggregations bonus
The economic subjects taking part in the aggregation must meet the following requirements:
- not be part of the same group;
- they must have been operational for at least two years;
- not be subject to control, not even indirectly, by the same party as provided for by art. 2359 of the Italian Civil Code;
- not be linked by a shareholding of more than 20%.
What the benefit consists of
The facility consists in the free of charge tax recognition of the higher values recorded in the accounts of the party resulting from the aggregation process (by way of goodwill or increase in the value of capital goods), up to a maximum of 5 million euros (for the excess it is possible to opt for substitute tax on company reorganizations).
Therefore, the benefit entails tax deductibility of the higher depreciation and recognition of the higher values when quantifying any capital gains or losses from disposal.
Innovations introduced by the 2021 Budget Law for the aggregations bonus
The 2021 Budget Law has introduced a further incentive. In fact, it is envisaged that, in the event of a merger, demerger or transfer of a company, resolved between 1.1.2021 and 31.12.2021, it will be possible, for the parties entitled, to transform into a tax credit the deferred tax assets (DTA), even if not recorded in the financial statements, referring to tax losses and ACE surpluses.
The maximum amount that may be transformed by each party is equal to:
- 2% of the sum of the assets of the parties participating in the merger or spin-off, as resulting from the balance sheet, without considering the party with the highest amount of assets;
- 2% of the sum of the assets transferred.
The transformation is subject to payment of a fee equal to 25% of the total deferred tax assets transformed, to be paid in two tranches.
The legislator’s intervention is undoubtedly aimed at providing further incentives for business combinations, which are currently considered a special tool for business growth, capable of bringing together expertise, know-how, structures, workforce and economic resources in order to improve competitiveness on the market. To greater reason, such operations, in an optical of repositioning of market will be able to generate:
- firstly, benefits to the companies in terms of strengthening the structure from a commercial, productive, technological and administrative point of view
- secondly, to improve the financial side of the cash-flow also using the tax benefits provided by the legislature.