As previously reported, on 14 September 2011, the Parliament approved the austerity package, which also includes a new regime for the carrying forward of tax losses for entities subject to corporate income tax (IRES) (i.e. resident companies and Italian permanent establishments of foreign companies). The new regime is summarized below.
|-||Ordinary losses may be carried forward indefinitely and may be offset against future taxable income, up to a limit of 80% of the taxable income (the "80% limitation).|
|-||Losses exceeding 80% of the taxable income may be carried forward indefinitely and used to offset the taxable income in subsequent years, subject to the 80% limitation.|
|-||Losses derived in the first 3 years from the beginning of the business activity may be carried forward indefinitely without being subject to the 80% limitation.|
|-||The new regime applies to losses incurred in the fiscal year 2011 for companies with the fiscal year coinciding with the calendar year.|
|-||Losses incurred before 2011 can be carried forward under the old regime (i.e. a 5-year time limitation without being subject to the 80% limitation).|