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Transformation of DTAs into tax credits, new provisions of the converted Sostegni-bis Decree

by Mirko Meuti | Aug 3, 2021 | Blog



The merger bonus, reintroduced by Article 11 of Decree-Law 34/2019, is a facility that concerns business combinations through extraordinary merger, demerger and business contribution transactions carried out from 1 May 2019 to 31 December 2022.

Beneficiaries of this facility are resident corporations (Joint-stock companies., Limited companies., 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 demerger; (iii) transferee entity.


Law No. 178/2020 (the 2021 Budget Law) introduced an additional incentive for business combinations: in the event of a merger, demerger or business contribution, resolved between 1.1.2021 and 31.12.2021, it is allowed, for the parties entitled, to transform into a tax credit the deferred tax assets (DTAs), even if not recognised in the financial statements, referring to tax losses and ACE surpluses.

The maximum amount that can be transformed by each party is equal to:

  • 2% of the sum of the assets of the entities participating in the merger or demerger, as shown in the balance sheet, without considering the entity with the largest amount of assets;
  • 2% of the sum of the assets transferred.

The transformation is conditional on the payment of a fee equal to 25% of the total deferred tax assets transformed, to be paid in two tranches.






The Sostegni-Bis Decree intervenes with reference to the possibility of transforming into a tax credit the DTAs deriving from tax losses and ACE excesses granted, by Article 1, paragraphs 233 – 243 of Law 178/2020, in connection with business combinations.

In this respect, the condition that, in order to benefit from the relief, the merger, demerger or business contribution operations had to be approved by the shareholders’ meeting in the period between 1.1.2021 and 31.12.2021, has been replaced by the provision that, in the same period, the project was approved by the competent administrative body.

Briefly, the relief is now conditional on the fact that in the “solar” 2021 takes place

  • in the case of mergers and demergers, the approval of the project by the competent administrative body of the participating companies;
  • in the case of contributions, the approval by the competent administrative body of the transferor.

What is not relevant, however, is whether the shareholders’ meeting has passed a resolution, which, according to the new wording, could also take place in 2022.





The measure gives an acceleration to support business combination operations. Therefore, a wide range of beneficiaries is expected since by 31 December 2021 the competent administrative bodies will have to approve the projects relating to mergers, demergers and transfers in order to take advantage of the tax relief introduced by the Budget Law.



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