Edited by the TRS Team
The 2026 Budget Law (Law No. 199 of December 30, 2025) was published in the Official Journal on December 30, 2025, “State Budget Forecast for fiscal year 2026 and multi-year budget for 2026-2028” (Official Journal General Series No. 301 of 12/30/2025 – Ordinary Supplement No. 42/L), effective from January 1, 2026.
Below is a brief overview of the main legislative updates introduced regarding corporate income tax for commercial and industrial companies:
Elimination of the instalment taxation of capital gains – Art.1 p. 42 – 43
The 2026 Budget Law amends paragraph 4 of Article 86 of the TUIR, establishing that capital gains realised on fixed assets, capital assets and participation other than those exempt pursuant to Article 87 of the TUIR (Participation Exemption) must be fully included in taxable income in the fiscal year in which they are “realised”.
However, capital gains realised from the transfer of a business or a business branch unit may still be split over a maximum of five fiscal years, provided that the business or business branch has been held for a period of no less than three years.
The provision under review applies to capital gains realised starting from the fiscal year following the one in progress as of December 31, 2025 (i.e. from 2026 for companies with a calendar fiscal year).
It should be noted that, with regard to the calculation of advance payments due for the fiscal year following the one in progress as of December 31, 2025, the aforementioned provisions will be taken into account.
Substitute tax for the release of equity reserves subject to tax suspension – Art. 1, p. 44–45
The recognition for tax purposes of revaluation surpluses, reserves, and tax‑suspended funds is reintroduced for those items existing in the financial statements for the fiscal year in progress as of December 31, 2024 and still remaining in the financial statements for the fiscal year in progress as of December 31, 2025, through the application of a substitute tax on Corporate income tax (i.e. 24% IRES) and Regional production tax (i.e. 3,9% IRAP) at a rate of 10%.
This rule applies to those who can evaluate, in the medium term, the distribution of such reserves under tax suspension (e.g., reserves that, in the event of distribution, contribute to taxable income) to their shareholders.
It should be noted that the payment of the substitute tax does not eliminate any civil law restrictions related to the distributability itself.
According to the provisions of the 2026 Budget Law, this substitute tax must be settled in the corporate income tax return (IRES return) for the fiscal year in progress as of December 31, 2025 and paid in four equal instalments:
- the first instalment by the deadline for the payment of the balance of income tax relating to the fiscal year ending as of December 31, 2025, and
- the remaining instalments by the deadlines for the payment of the balance of income tax for the following three fiscal years.
Amendments to the partial exclusion regime for dividends and capital gains – Art. 1, p. 51–54
The 2026 Budget Law amended Article 89 of the TUIR, affecting the rule that excludes 95% of dividends from taxable income received by corporations and commercial entities.
Specifically, a new minimum shareholding requirement has been introduced. To benefit from the exclusion, it is now necessary to hold:
- a direct participation in the capital of the issuing company of at least 5%;
- or a participation with a tax value of at least €500,000.
It is further specified that, for the purposes of calculating the 5% threshold, indirect shareholdings within the same group must also be taken into account, as provided by Article 2359, p. 1 of the Civil Code.
This means that corporations and commercial entities holding a participation in the capital of the issuing company below 5% or with a tax value below €500,000, the amount of dividends received will be fully taxed.
In addition, the same shareholding requirements must be met by non‑resident companies and entities to benefit from the reduced 1.20% withholding tax on Italian‑source dividends (otherwise, they may still rely on the withholding tax rate provided by the relevant double taxation treaties).
Also, Article 87 of the TUIR, concerning the exemption of capital gains (PEX), has been amended.
In this case as well, the exemption is subject to holding a direct participation in the capital of the issuing company of at least 5% or a participation with a tax value of at least €500,000, in addition to the requirements already provided by Article 87 p.1 of the TUIR (i.e., uninterrupted ownership from the first day of the twelfth month preceding the date of the transfer; classification of the participation as a fixed financial asset in the first financial statements closed during the holding period, tax residence of the participated company in nonprivileged jurisdictions, and the carrying on of a commercial business by the participated company).
Finally, it should be noted that the change relating to the size of the shareholding applies to profit distributions, reserves, and other funds approved starting from January 1, 2026, as well as to capital gains realized in connection with the sale of shares or quotas, financial instruments similar to shares, and partnership agreements acquired or subscribed starting from January 1, 2026.
Valuation exception for current assets (securities) for OIC adopters – Art. 1 p. 65–67
For entities preparing financial statements under Italian accounting principles (OIC adopters) and for insurance undertakings (with implementing rules set by the insurance supervisory authority), the law confirms for fiscal years 2025 and 2026 the option to value securities not intended to be held on a long-term basis at their carrying amount as per the last duly approved annual financial statements, rather than at market value, except for impairment losses of a lasting nature.
However, such entities must allocate to a non-distributable reserve (i.e. not distributable to shareholders and not usable to cover losses) profits equal to the difference between the amounts recorded under this option and the market values recorded at the end of the reference period, net of the related tax expense.
In practice, securities recorded as current assets may be kept at prior-year carrying amounts, with an obligation to allocate an unavailable reserve equal to the unrecognised write-down.
Furthermore, it is established that, if the operating profits are lower than the aforementioned difference, the reserve must be supplemented using profit reserves or other available equity reserves or, failing that, using profits from subsequent fiscal years.
Deductibility of depreciation for goodwill and other intangible assets that generated deferred tax assets (DTA) – Art. 1 p. 77
The law further amends the rules on the deductibility of prior-year depreciation quotas (i.e., not yet deducted up to the fiscal year in progress as of December 31, 2017) relating to goodwill and other intangible assets that gave rise to deferred tax assets (DTA).
Specifically, a part of the deductible quota for the fiscal year in progress as of 31.12.2027 – equal to 12,36% – is deferred and becomes deductible in two equal instalments in the following years, i.e., 6.18% in the fiscal year in progress as of December 31, 2028 and 6.18% in the fiscal year in progress as of December 31, 2029.
As a result, the deductibility for corporate income tax (so called IRES) and regional production tax (so called IRAP) will be as follows:
- 0% for the fiscal year in progress as of December 31, 2025;
- 3.25% for the fiscal year in progress as of December 31, 2026;
- 8.22% for the fiscal year in progress as of December 31, 2027;
- 19.76% for the fiscal year in progress as of December 31, 2028;
- and 19.77% for the fiscal year in progress as of December 31, 2029.
Prohibition of offsetting in the presence of expired roles – Lowering of the threshold from Eur 100,000 to Eur 50,000 – Art. 1, p. 116
Where taxpayers have overdue tax liabilities enrolled in the tax roll for total amounts exceeding Eur 100,000, a prohibition applies to the set-off of tax payables and tax credits, including those arising from enforceable assessments or notices recovering tax credits.
The 2026 Budget Law lowers the threshold triggering the set-off prohibition from Eur 100,000 to Eur 50,000, effective for set-offs performed from January 1, 2026.
The prohibition does not apply if:
- there is a deferral of the amounts entered in the tax roll;
- an application for the scrapping of tax rolls is submitted.
Offsetting is also prohibited for excess amounts. Therefore, for example, if there are tax rolls for Eur 70,000 and offsettable credits for Eur 80,000, the excess Eur 10,000 cannot be offset without first paying the tax roll.
Scope of application
The prohibition concerns “horizontal set-off” (i.e., between different types of tax liabilities and credits; e.g., VAT with IRES) in the F24 payment form, while “vertical set-off” remains permitted (i.e., between liabilities and credits of the same tax; e.g., IRES with IRES).
The prohibition also extends to the set-off of incentive credits reportable in the RU box of the CIT return, such as the R&D tax credit and credits arising from construction-related incentives under Art.121 of Decree-Law No. 34/2020.
Set-off of credits relating to social security contributions to pay to the National Social Insurance Institute (INPS) and insurance burdens to pay to the Public Insurance Authority (INAIL) remains possible; however, where the prohibition applies, INPS/INAIL credits and credits subject to the prohibition may not be reported in the same F24 payment.
Deductibility of costs from stock option plans – Art. 1 p. 131 lett.b
The law revises the tax treatment of share-based payment arrangements by extending to cash-settled stock option and stock grant plans the rule in Article 95, p. 6-bis of the TUIR, previously reserved for equity-settled arrangements, under which related costs are deductible only when, and to the extent that, the instruments are actually assigned to beneficiaries.
Accordingly, the deduction is allowed on a “cash basis” (i.e., at the time of actual assignment of the financial instrument) rather than an “accrual basis”.
In other words, the deduction of the costs relating to cash-settled stock option plans in favor of employees, collaborators, and managers is deferred until the options granted are exercised (i.e., at the time of actual payment of the costs in question), aligning this deduction with the occurrence of the Individual Income Tax (IRPEF) taxable event for the beneficiary, starting with plans approved in the fiscal year following the one in progress as of December 31, 2025.
These provisions apply to IAS/IFRS adopters, but also apply to OIC adopters who, as permitted by OIC 11, use IFRS 2 to account for the transactions in question.
Deductibility of the cost of trademarks, goodwill, and intangible assets with indefinite useful lives – Art. 1, p. 131 lett. c
The Law has amended, for the year 2026, the tax deductibility regime for trademarks, goodwill, and intangible assets with indefinite useful lives by IAS/IFRS adopters.
This is a preview of the provisions related to the corporate income tax reform initiated by Law No. 111/2023.
In particular, it establishes that, for the fiscal year following the one in progress as of December 31, 2025, for entities that prepare their financial statements in accordance with IAS/IFRS international accounting standards, the deduction of the cost of trademarks, goodwill, and intangible assets with indefinite useful lives recorded, or the higher values recognized for tax purposes, recorded in the same fiscal year, by way of derogation from Art.103, p. 3-bis of the TUIR, is allowed up to a maximum of 1/18 of their value, starting from the fiscal year in which the related costs are recorded in the income statement and up to the amount of the latter, exceeding the previous extra-accounting deduction (i.e., regardless of the recording in the income statement).
In fact, according to IAS 38, goodwill, as well as trademarks and other intangible assets, if they have an indefinite useful life, are not subject to accounting depreciation – unlike what happens for OIC adopter – but must be subjected to an impairment test at least annually.
This procedure requires impairment to be recognized when the carrying amount of the asset exceeds its recoverable amount; the impairment loss, which reduces the value of the intangible asset, is recorded in the income statement.
Under the new regime, the tax deduction of costs relating to intangibles may therefore be made, up to a maximum limit of 1/18 of their value, only from the fiscal year in which the related costs are recognized in the income statement – as impairment – and up to the amount of such costs.
The portions (of the cost) not deducted before the write-down may be recovered in subsequent years, in compliance with the annual deductibility limit (1/18), until the total amount of the write-down has been fully absorbed.
Prior to the regulatory change in question, however, for IAS/IFRS adopters, the deduction of the cost of trademarks and goodwill was allowed on an extra-accounting basis, regardless of whether it was recorded to the income statement, and always within the maximum limit of 1/18 of the value.
Finally, it should be noted that the new rules do not affect the extra-accounting deduction of intangible assets already recorded in the financial statements, which remain subject to the previous regime.
Electronic meal vouchers – Increase in exemption – Art. 1, p. 14
The threshold for non-taxability for the purposes of Individual Income Tax (IRPEF) for electronic meal vouchers has been increased from Eur 8 to Eur 10.
The threshold for paper meal vouchers remains at Eur 4.
The new exemption limit applies to electronic meal vouchers assigned from January 1, 2026.
Tobin tax – Art. 1, p. 29
The Law provides for the doubling of the proportional rates relating to the so-called “Tobin tax”, referred in Art. 1, p. 491-495 of Law No. 228/2012.
This tax applies to financial transactions (excluding Intra-group transactions) relating to the following cases:
- the transfer of ownership of shares and participatory financial instruments;
- derivative contracts;
- high-frequency trading.
In particular, the 2026 Budget Law doubled the rates applicable to the first case (tax on transfers of shares and participatory financial instruments) and the third case listed above (high-frequency trading), while leaving the tax rate on derivatives unchanged.
The changes in the rates are as follows:
- for transfers that do not take place on regulated markets and multilateral trading facilities, the rate increases from 0.2% to 0.4%;
- for transfers on regulated markets and multilateral trading facilities, the rate increases from 0.1% to 0.2%;
- for high-frequency trading, the rate increases from 0.02% to 0.04%.
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