(Updated January 2023)

TAX PERIOD Generally coincides with the calendar year (there may be a tax period other than the calendar year).

OFFICE OF THE COMPANY Companies with production activities / office or administrative office in Italy are subject to tax in Italy.

TAX INCOME OF COMPANIES ("IRES") Rate: 24% profit tax. The tax is final. Shareholder is not charged of any tax credit.

SET ON REGIONAL ECONOMIC ACTIVITIES ("IRAP") Rate: 3.9% Operating income before costs of personnel (regions may provide an additional 1%).

TAXATION OF INCOME FROM INVESTMENTS IN CAPITAL COMPANY Resident companies: tax base contributes to the formation of 5% of distributed, in certain cases, you can opt for the taxation of transparency; Non-resident companies: withholding tax of 26% or a reduced rate, if provided by the relevant bilateral agreement to avoid double taxation, exemption from withholding tax in case of application of the EU Parent-Subsidiary Directive.

TAXATION OF CAPITAL GAINS FROM SALE OF SHARES IN THE CAPITAL OF THE COMPANY ("CAPITAL GAINS") Resident companies: contributes to the formation of the taxable capital gain if you contribute 5% of certain requirements ("participation exemption"), or taxation in the ordinary way; Non-resident companies: in general, no taxation of capital gains in Italy under the relevant bilateral agreement to avoid double taxation.

LOSS OF COMPANY CAPITAL RESIDENTS Carry forward of losses: losses carried over without limit of the first 3 fiscal years; deduction limited to 80% of net losses for the period of the fiscal years following the first three; In the case of fiscal consolidation: it is possible to add up the taxable basis of the single-group and therefore can be compensated for the losses of group companies with profits of another group company.

DEPRECIATION Depreciation on a straight-line basis over the purchase price or production cost internal, not the expected depreciation Buildings: 3%; the land is not depreciated; Plant and equipment: 6 to 17.5%, industrial and commercial equipment: 12-40%; Goodwill and trademarks: 5.55% Software: 50%; Cars: 25%; trucks: 20%.

DEDUCTIBILITY OF INTEREST Interest expenses are deductible to the extent of 30% of the ROL (= gross operating income from operations before depreciation, amortization and lease payments) are excluded from banks, insurance companies, financial companies and real estate management.

VALUE ADDED TAX ("VAT") Ordinary rate: 22%; reduced rates: 4%, 5% and 10% (eg photovoltaic systems).

SALE OF PROPERTY (RESIDENTIAL UNITS) The general rule is the exemption from VAT and the application of cadastral fixed tax, except for what concern transfers between individuals.

In the case of disposals by a construction company (disposals within five years or by choice) is applicable VAT with the reverse charge mechanism and registration tax of € 200. In addition is due mortgage tax of 3% and 1% cadastral tax, except transfers between individuals.

MUNICIPALITY TAX ON BUILDINGS (IMU) Buildings, partly equipment fixed to the ground (eg wind turbines and photovoltaic), and are subject to the municipal building areas that ranges depending on the municipality from 0.86% to 1.06%.The tax base is the value of the property, determined on the basis of the cadastral income attributed.