PG & Partners

The criteria for establishing if a company is to be considered operating or dormant have become more stringent, and the percentages adopted to establish the minimum income to be reported have been increased. Specifically, it is presumed that a company is dormant if the aggregate revenue and income, other than extraordinary income, is lower than the sum of the following amounts:

- 2 per cent of the value of shares or other equity interests in the capital of corporations, including if recorded as Financial Assets, increased by the value of receivables;

- 6 per cent of the value of Fixed Assets consisting of property and ships used for the conduct of commercial or fishing activities, rescue or assistance at sea and demolition, whether owned or finance leased;

- 15 per cent of the value of other Assets, whether owned or finance leased.

Without prejudice for the possibility to conduct tax assessments for IRES (corporation tax) purposes, it is presumed that the income for the tax period is not lower than the total of the amounts deriving from the application of specific percentages (1.50, 4.75 or 12 per cent).However, the rules do not apply, inter alia, to: - entities which, due to their particular activity, are required to be set up in the form of corporations;

- entities in their first year of business;

- companies in receivership ("amministrazione straordinaria" and "amministrazione controllata").

The non-ordinary course of business has been removed from among the cases of exclusion from the application of the rules.The excess tax credit shown in the VAT Return will neither be refunded nor be available for offset and may not be assigned. A taxpayer who provides evidence of extraordinary events preventing him from attaining the minimum objectives required by the legislation (realization of proceeds, increase of stocks and proceeds, and revenue), may request non-application of the rules.The rules apply with effect from the tax period in progress at 4 July 2006.

	20-10-2006	Dormant companies back to the list
		The criteria for establishing if a company is to be considered operating or dormant have become more stringent, and the percentages adopted to establish the minimum income to be reported have been increased. Specifically, it is presumed that a company is dormant if the aggregate revenue and income, other than extraordinary income, is lower than the sum of the following amounts: - 2 per cent of the value of shares or other equity interests in the capital of corporations, including if recorded as Financial Assets, increased by the value of receivables; - 6 per cent of the value of Fixed Assets consisting of property and ships used for the conduct of commercial or fishing activities, rescue or assistance at sea and demolition, whether owned or finance leased; - 15 per cent of the value of other Assets, whether owned or finance leased. Without prejudice for the possibility to conduct tax assessments for IRES (corporation tax) purposes, it is presumed that the income for the tax period is not lower than the total of the amounts deriving from the application of specific percentages (1.50, 4.75 or 12 per cent).However, the rules do not apply, inter alia, to: - entities which, due to their particular activity, are required to be set up in the form of corporations; - entities in their first year of business; - companies in receivership ("amministrazione straordinaria" and "amministrazione controllata"). The non-ordinary course of business has been removed from among the cases of exclusion from the application of the rules.The excess tax credit shown in the VAT Return will neither be refunded nor be available for offset and may not be assigned. A taxpayer who provides evidence of extraordinary events preventing him from attaining the minimum objectives required by the legislation (realization of proceeds, increase of stocks and proceeds, and revenue), may request non-application of the rules.The rules apply with effect from the tax period in progress at 4 July 2006.