Italy has no special tax regulations for mergers and acquisitions (M&A), which are principally governed by Presidential Decree no. 917/1986 (the Italian Consolidated IncomeTax Code — ITC).
Italy has no special tax regulations for mergers and acquisitions (M&A), which are principally governed by Presidential Decree no. 917/1986 (the Italian Consolidated IncomeTax Code — ITC).
As a general rule, resident companies are subject to corporate income tax (imposta sul reddito delle società — IRES) and regional tax on productive activities (imposta regionale sulle attività produttive — IRAP).The basic IRES rate is 24 percent (down from 27.5 percent in fiscal year 2016).The basic IRAP rate is 3.9 percent, although IRAP rates vary according to the region where the company operates. Higher rates apply to banks, financial institutions and insurance companies, and to certain other industries.
This report describes the main tax issues to be considered when structuring a cross-border acquisition and is based on the tax rules applicable up to January 2018.
Accounting and legal issues are outside the scope of this report, but some of the key points to be considered when planning a transaction are summarized.
The following summary of Italian tax issues includes the amendments introduced by Law no. 205/2017 (2018 Budget Law). The most significant measures involve:
How these tax changes affect M&A deals is summarized in the following sections.
Generally, an acquisition may be structured as an asset deal or a share deal. The tax implications of these two structures are different.
Purchase of assets
In an asset purchase, a person buys a business1 from another person for consideration.
Even if an appraisal of the business is not mandatory, it is often useful to have one in order to prove that the selling price is at arm’s length and show how the purchase price is allocated.
The buyer may step up the tax basis of the assets to the price paid for them and then amortize and depreciate these assets based on their new tax basis.
From the seller’s perspective, the sale of a business may give rise to a taxable capital gain or a deductible loss, which is the positive or negative difference, respectively, between the sale price and the tax basis of the business. The capital gain (or loss) is included in (or deducted from) the seller’s overall IRES base in the year in which it is realized. The ordinary IRES rate (24 percent) applies. If the seller has held the business for more than 3 years, it may elect to spread the capital gain in equal installments over a period of up to 5 years. The capital gain or capital loss deriving from the sale of a business unit is not included in the IRAP base.
The buyer of a business is jointly and severally liable with the seller for any tax liabilities connected with the business and originating from any breaches of tax rules:
The buyer’s maximum liability is equal to the value of the business acquired. In order to limit the buyer’s liability, both parties may apply for a certificate from the Italian tax
authorities, attesting any tax debts existing on the acquisition date. The buyer’s exposure can then be limited to the liabilities shown on the certificate. The buyer is not responsible for any tax liability of the seller if the Italian tax authorities do not issue the certificate within 40 days of the application or if no liabilities are indicated on the certificate.
There are no particular tax rules for allocating the purchase price to the individual assets and liabilities forming the business, so the purchase price should be allocated based on the fair market value of the assets and liabilities transferred.The buyer and the seller agree the overall consideration to be paid for
the business. If they wish, they can then apportion the total consideration among the assets in order to identify, insofar as commercially justifiable, the price paid for any individual assets belonging to the business, including goodwill.
The portion of the consideration paid to acquire the goodwill of the business is recognized for tax purposes.
Goodwill may be amortized for IRES and IRAP purposes over 18 years; consequently, the deductible amortization allowance may not exceed one-eighteenth of its value per year.
Depreciation and amortization
Deductible amortization allowances may not exceed 50 percent of the cost per year in the case of copyrights, patents, methods, formulae and industrial, commercial or scientific know-how. In the case of trademarks, the annual amortization allowance may not exceed one-eighteenth of the cost.
Tangible assets may be depreciated from the tax year in which they are put into use, using the straight-line method.
Tax depreciation charges cannot be higher than the charges resulting from the application of the tax depreciation rates published in a Ministry of Finance decree. In the first tax year of use, these charges are halved.
These rules do not apply to assets worth less than 516.46 euros (EUR), because they can be fully depreciated in the tax year of acquisition.
The 2018 Budget Law extends the right to depreciate 130 percent (super-depreciation) and 250 percent (hyper- depreciation) of investments made in certain new tangible assets in 2018. The deadline for super-depreciation is extended to 30 June 2019, and for hyper-depreciation to 31 December 2019, if all the following requirements are met.
Tax losses and other possible tax attributes are not transferred in an asset deal as they remain with the seller.
On certain conditions, value added tax (VAT) credits may be transferred to the buyer along with the business.
Value added tax
Business acquisitions are not subject to VAT. However, the sale of single assets by a VAT payer is generally subject to VAT at the ordinary rate of 22 percent (increasing to 24.2 percent in 2019, 24.9 percent in 2020, and 25 percent in 2021).
According to the Registration Tax Code (RTC), the transfer of a business is subject to registration tax, generally paid by the buyer (although the parties may agree otherwise). However, both parties are jointly and severally liable for the payment of the registration tax.
The tax rate depends on the type of asset transferred:
If the assets are subject to different registration tax rates, the liabilities of the business must be allocated to the different assets in proportion to their respective values. If the purchase price is not apportioned to the various assets, the registration tax is levied at the highest rate of those applicable to the assets (generally, the rates for buildings or land). Thus, it
is recommended that the purchase price should be clearly allocated to each asset so that there is separate taxation based on the different tax rates.
The RTC provides that the tax basis of a business is its fair market value (not its purchase price, which may be different). The fair market value is subject to assessment by the registration tax office. Therefore, it is often advisable to obtain an appraisal from an independent expert in advance of the transaction.
Step transactions: new tax rules
When an asset deal is structured through the contribution of a business into a new company in exchange for shares in the new company, followed by the sale of those shares, it might be argued that only EUR200 registration tax is due on each transaction.
However, over the last few years, the Italian tax authorities have often treated such two-step transactions as a straightforward sale of business, subject to registration tax of 0.5 percent, 3 percent or 9 percent, depending on the type of assets. The tax authorities argue that the anti-avoidance rule in article 20 of the RTC allows deeds to be defined by the economic purpose they achieve and by their interaction with other deeds executed immediately before or after.
Although several Supreme Court judgments have upheld this interpretation, it has attracted severe criticism from practitioners and academics.
The 2018 Budget Law redefines the scope of application of article 20 of the RTC, which now provides that the correct tax treatment depends on the nature of each single deed to be registered, regardless of any external interpretations or the scope of other transactions that might be linked to the one to be registered. This amendment took effect on 1 January 2018.
The 2018 Budget Law states that step transactions can be challenged only through the general anti-abuse rules, if applicable.
The impact of this change in law on existing litigation and past step transactions is uncertain.
Purchase of shares
No special issues arise for the buyer, except for the classification of the shares in the balance sheet (as inventory or fixed financial assets), which may affect the tax treatment of their subsequent sale.
In principle, the target company retains the tax attributes it had before the share acquisition; however, in certain cases, some of them may be jeopardized.
Tax indemnities and warranties
In a share deal, the buyer takes over the target company together with all its liabilities, including contingent liabilities. Therefore, the deal normally requires more extensive indemnities and warranties than an asset deal.
Tax losses and certain other tax attributes
A company cannot carry forward its available tax losses, interest expense and allowance for corporate equity (ACE) if it undergoes a change of control and its business activity also changes.This regime, aimed at tackling the abusive trading of tax attributes, does not apply if the following two conditions are met:
Transactions involving shares, quotas, bonds and other securities are VAT-exempt.
Notarial deeds and private deeds with notarized signatures are subject to a fixed registration tax of EUR200 when they concern the trading of shares.
No stamp duty is applicable.
A financial transaction tax (FTT) is levied on transfers of shares (not quotas) issued by Italian companies. The FTT is due by the final buyer. The standard FTT rates are:
Sales of shares between companies of the same group are normally not taxable for FTT purposes.
Share-for-share deal (contribution of a significant shareholding)
Article 177 (2) of the ITC establishes how to calculate capital gains when shares are contributed. For example, Company A contributes shares in Company C to Company B and Company B thereby acquires or increases (pursuant to an obligation imposed by law or articles of association) a controlling interest in Company C. In return for the contribution, Company A receives shares in Company B. To determine Company A’s gain, reference must be made to the increase in Company B’s equity as a result of the contribution. Company A’s capital gain is the difference between:
Step-up of values
In a share deal, the acquired company’s assets retain the same book value and tax basis as they had before the share acquisition. Thus, no step-up for tax purposes is usually allowed.
However, the tax basis of goodwill, trademarks and other intangible assets may be stepped up by levying a 16 percent substitute tax.
For stepped-up goodwill and trademarks, the minimum tax amortization period for the new higher book value is reduced to 5 years (from 18 years).
The 2018 Budget Law extends this rule to the acquisition of shares in non-Italian companies, for 2017 and later fiscal years.
It is possible to step up the tax basis of the target’s underlying assets by merging the acquisition vehicle and target company after closing. In this case, the step-up of the tax basis of the underlying assets is possible if the following substitute taxes are paid:
Tax value of the shares to be sold
The 2018 Budget Law allows resident individuals and non- resident entities (having no permanent establishment in Italy) to step up the tax basis of their shares in unlisted resident entities if all the following conditions are met:
A foreign company that intends to acquire a business or shares in a company located in Italy may do so:
Local holding company
The most common forms of company in Italy are limited liability companies (Srl) and joint-stock companies (SpA).
If the asset is acquired through an Italian subsidiary (newly incorporated or already existing), repatriation of profits is subject to the domestic withholding tax (WHT) on dividends, unless the requirements for the EU Parent-Subsidiary Directive exemption are met or a lower (or nil) treaty rate applies. If a tax treaty applies, any subsequent disposal of the shares in the Italian subsidiary is not generally taxed in Italy.
Typically, an Italian holding company is used where the buyer wishes to offset the interest expenses against the target’s taxable profits through a tax consolidation or merger, in accordance with the earnings-stripping rules.
Foreign parent company
Tax treatment of capital gains
A foreign buyer may choose to make the acquisition itself, perhaps to shelter its own taxable profits with the financing costs.
Under the tax rules in force up to and including 2018, if a non-resident company realizes a capital gain on the sale of a qualifying2 equity interest in an Italian resident company and does not have a permanent establishment in Italy, IRES is payable as follows:
The 2018 Budget Law replaces the above system of taxation, from 1 January 2019, with a flat 26 percent substitute tax, aligned with the capital gains tax on non-qualifying shares.
On the disposal of a non-qualifying equity interest in an Italian resident company, gains realized by a non-resident seller (with no permanent establishment in Italy) are exempt in Italy if the shares are listed on a regulated market or the seller is resident in a state that allows an adequate exchange of information with Italy. In other cases, these capital gains may be taxed at 26 percent, unless they are exempt under a tax treaty.
Tax treatment of dividends
Dividends paid to non-resident shareholders are generally subject to a final withholding tax of 26 percent.
A reduced 1.2 percent withholding tax is levied if the beneficial owner is a company resident and subject to tax in an European Economic Area (EEA) member state that allows an adequate exchange of information with Italy.
Dividends paid to qualifying EU parent companies are not subject to withholding tax. To qualify, the parent company must:
Under an agreement between the EU and Switzerland, dividends paid to Swiss parent companies may be exempt from withholding tax under conditions similar to those in the Parent-Subsidiary Directive.
The target company (assets or shares) can also be acquired through a permanent establishment of a foreign company. Under Italian law, a foreign company may establish a branch (permanent establishment) in Italy. However, branches cannot be considered as autonomous legal entities. From a corporate tax perspective, branches of non-resident companies are normally treated as resident corporations and taxed on their local profit.
Italy’s definition of permanent establishment largely follows the definition in the Organisation for Economic Co-operation and Development’s (OECD) model tax treaty.
A buyer using an Italian acquisition vehicle needs to consider whether to use debt and/or equity.
The principal advantage of debt is the potential deductibility of interest, as dividend payments cannot be deducted for tax purposes. Another potential advantage is the deductibility of expenses, such as guarantee fees, when computing income for tax purposes.
In a leveraged buyout (LBO) involving a merger or tax consolidation with the target, companies may offset interest against income of the target, within the limits described below (see ’Deductibility of interest’).
The Italian tax authority used to challenge some LBO transactions aggressively, mainly when the acquisition was made by a foreign entity.
On 30 March 2016, the tax authority clarified the tax treatment of LBOs via Circular 6 as follows:
Deductibility of interest
Interest expenses are fully deductible, to an amount equal to the interest income accrued in the same tax period. Any surplus is deductible to the extent of 30 percent of gross operating income (roughly, earnings before income taxes, depreciation and amortization — EBITDA).
Any interest expenses exceeding 30 percent of EBITDA may be carried forward for deduction in subsequent tax periods, to the extent that the net interest expenses (i.e. those exceeding interest income) accrued in future tax periods are less than 30 percent of each period’s EBITDA.
The portion of EBITDA not offset against interest expenses, and financial charges pertaining to a period, may be added to the EBITDA of subsequent tax periods.
The 2018 Budget Law abrogates the provision in article 96 of the ITC that allows gross operating profit (ROL) to be increased by an amount equal to the dividends distributed
by non-resident subsidiaries. This amendment is effective for 2017 and later fiscal years.
Where a company is part of a domestic tax consolidation arrangement, any non-deductible interest expenses (i.e. the portion exceeding 30 percent of EBITDA) may be used to offset the taxable income of another company within the tax group, if that company’s own EBITDA has not been fully offset against its own interest expenses.
The above limits do not apply to the deductibility of interest expenses incurred by:
Insurance companies, holding companies of insurance groups and qualifying asset management companies can deduct only 96 percent of interest.
Withholding tax on interest
A withholding tax (WHT) of 26 percent is applied to interest payments made to non-resident companies, unless a reduced treaty rate or an exemption is available.
No WHT is due on interest payments made by Italian companies to Italian banks.
A WHT exemption on interest payments may apply if the following conditions are met:
The EU Interest and Royalties Directive exemption may also apply if the following conditions are met:
Withholding tax generally does not apply to corporate bonds listed on a regulated market or multilateral trading facility in a country that allows an adequate exchange of information.
A buyer may use equity to fund an acquisition. Contributions in cash do not give rise to taxable income for the recipient company.
Cash and contributions in kind to the capital of resident companies are subject to a fixed registration tax of EUR200. Registration, mortgage and cadastral taxes are due on contributions of real estate.
Under domestic law, there is a 26 percent WHT rate on dividends paid by Italian companies to foreign companies.
The ordinary WHT rate is reduced to 1.2 percent (1.375 percent before 2017) if the recipient of the dividend is a company resident within the EU or EEA.
If the EU Parent-Subsidiary Directive requirements are met (e.g. the EU parent company holds at least 10 percent of the shares for more than 1 year, is subject to tax and is the
beneficial owner of the dividend income), there is no WHT on dividend payments.
Deductibility of the notional cost of equity
Since 2011, Italian companies have been able to benefit from an additional deduction from their tax base: the allowance for corporate equity (ACE). The allowance is equal to the aggregate qualifying equity increase since fiscal year 2010, multiplied by a notional rate of return. The equity increases include those resulting from certain cash contributions, waivers of certain financial receivables owed by an Italian company to its shareholders, and undistributed profits set aside to freely disposable reserves.
The equity increases must be net of decreases resulting from distributions or assignments to shareholders and certain decreases that have to be made for anti-avoidance purposes.
The allowance is deducted from the company’s net taxable income and, if it exceeds the company’s net taxable income, the surplus can be carried forward indefinitely.
The ACE rates, set at 4.5 percent for 2015 and 4.75 percent for 2016, were reduced to 1.6 percent for 2017 and 1.5 percent for 2018 and later years.
Dividends not deductible for Italian tax purposes
Dividends paid by Italian companies to their shareholders may not be deducted from the IRES base.
Although equity offers less flexibility if the parent subsequently wishes to recover the funds it has injected, the use of equity may be more appropriate than debt in certain circumstances, such as the following:
Mergers, demergers and contributions of business units are usually tax-neutral transactions that do not trigger corporate income tax for companies or their shareholders.
Concerns of the seller
The tax position of the seller can have a significant influence on any transaction. If the seller of shares is an Italian company and if the shares are booked as inventory, any gain from the disposal of the shares must be included in full in the taxable income of the seller and taxed at the ordinary 24 percent IRES rate, as it is treated as revenue and not as a capital gain.
If the shares are booked as fixed financial assets in the financial statements (and have been since the fiscal year in which the shares were bought), any capital gain realized by the seller is 95 percent tax-exempt (participation exemption) if the shares:
These requirements must be satisfied from the first day of the third fiscal year preceding the year in which the shares are sold. Real estate companies are excluded from this regime if more than 50 percent of their aggregate asset value is represented by real estate other than assets built or purchased by the same company for resale or used in the business activity.
Conversely, capital losses on the disposal of shares that qualify for the participation exemption are not deductible by a corporate seller.
According to the Italian tax authorities, even if all the pre- conditions for the participation exemption are met, the regime does not apply to shares transferred in the context of a business transfer because the assets and liabilities included in that business must be considered as a ‘whole’ and cannot be unbundled (Circular 6/E of 13 February 2006).
Company law and accounting
M&A deals usually include transactions such as mergers, demergers and contributions in kind.
According to the Italian Civil Code, a merger involves the absorption of one or more companies by another company, resulting in the termination (without liquidation) of the absorbed companies and the transfer of their assets and liabilities to the absorbing company.
There are two types of mergers in Italy.
In the demerger of a company, all or some of its businesses are contributed to one or more other companies. The beneficiary companies may be newly incorporated or they may already exist.
The shareholders of the demerged company receive new shares issued by the companies to which the assets and liabilities are contributed.
In a contribution in kind (e.g. contribution of business units or shareholdings), a company transfers assets to another company and receives shares issued by the recipient in return.
As a rule, a sworn appraisal by a court-appointed expert is a prerequisite for contributions of business units (for limited liability companies, the contributing company can appoint the expert). The appraisal should describe the contributed assets and liabilities, the value assigned to each item and the criteria used for the appraisal. A notary public must execute the contribution deed.
Under Italian generally accepted accounting principles (GAAP), the above three transactions are normally recorded at book value without any step-up.
When preparing their financial statements, Italian companies should generally use Italian GAAP, as set out in the Italian Civil Code and interpreted by the Italian Accounting Organization (OIC). Italian companies may in most cases also adopt International Financial Reporting Standards (IFRS) to prepare their accounts. These accounting standards provide for a
step-up of the book values of the assets involved in a business combination, where certain conditions are met.
Finally, a common issue in transaction structuring is financial assistance. Broadly speaking, it is illegal for a company (or one of its subsidiaries) to give financial assistance, directly or indirectly, for the acquisition of that company’s shares. Therefore, it is necessary to evaluate the rules carefully when structuring the financing of the deal and its security package.
As a general rule, Italian groups can opt for a domestic tax consolidation regime if the Italian companies are controlled by an Italian company.
However, a non-resident company can be head of the tax group if both the following conditions are met:
The main advantage of tax consolidation is that 100 percent of the tax losses incurred by one or more companies of the tax group can be immediately offset against the taxable income of other group companies. Any consolidated tax losses can be used to offset up to 80 percent of consolidated taxable income in subsequent years. However, losses incurred before the start of the consolidation regime cannot be offset against the taxable income of other group companies. These tax loss carryforwards can only be offset against the taxable income of the company that incurred them.
Another advantage of tax consolidation is that the portion of interest expenses exceeding 30 percent of EBITDA (see ‘Deductibility of interest’ above) and generated after a company’s inclusion in the tax group can be used to offset the taxable income of another group company, if certain conditions are met.
To join a tax group, a subsidiary must have been directly or indirectly controlled by the parent company since the beginning of the financial year in which the option for tax consolidation
is exercised (control requirement). As group membership is optional, it is possible that not all the Italian subsidiaries potentially qualifying for tax consolidation will join the group.
The domestic tax consolidation regime is irrevocable for a period of 3 years, and there are specific rules on its termination. For example, it is terminated if the control requirement is no longer met or there are certain merger/ demerger transactions during the 3-year period.
Each consolidated company is liable for any tax liabilities, penalties and interest assessed by the tax authorities on its income. However, the controlling company is liable not only for its own tax liabilities but also — jointly and severally — for the tax liabilities, penalties and interest of each of the consolidated companies.
A non-resident company that (i) has a certain legal form, (ii) has no permanent establishment in Italy, and (iii) is resident in an EU or EEA member state with which Italy has a tax information exchange agreement may also appoint an Italian resident company (or a permanent establishment) to opt for the domestic tax consolidation regime together with each resident company or permanent establishment that has the same non-resident parent company.
Transactions between resident companies and non-resident companies must be valued at fair market value if doing so increases the taxable base of an Italian company and if the non-resident:
The fair market value is basically the arm’s length price under the criterion used in the OECD transfer pricing guidelines. In other words, the price of each intercompany transaction, if it implies an increase in the tax base, should be equal to the consideration that would have been paid for goods and services of the same or similar type, in free market conditions, at the same stage in the distribution chain, and at the same time and place as the goods and services in question (or, if no such criterion is available, at the nearest time and place).
Since 2010, a group can prepare documentation supporting its transfer pricing (this is not mandatory). If such documentation is prepared and complies with the standards set by the Italian tax authorities, then a penalty-protection system applies and the group would not be subject to penalties if a tax assessment results in a transfer pricing adjustment.
If the documentation does not comply with the Italian tax authority’s guidelines or is deemed incomplete, administrative penalties ranging from 90 to 180 percent of the maximum
tax assessed would be imposed for any transfer pricing adjustment.
As of 2016, multinational enterprises that meet specific requirements are required to file a country-by-country (CbyC) report, which must include their by-country revenues, gross profit, paid and accrued taxes, and additional indicators of actual economic activities.
The CbyC report must be filed within 12 months of the group’s year-end.
The Italian tax authority officially postponed the filing deadline for the first year of application (2016) to 9 February 2018.
Foreign investments of a local company
The controlled foreign company (CFC) rule provides that the profits realized by a non-resident company are considered as profits of an Italian resident person if:
As of 2016, foreign tax jurisdictions can qualify as low-tax regimes if their nominal level of taxation (tax rate) is lower than 50 percent of the combined IRES rate and IRAP standard
3.9 percent rate.
However, the CFC rule does not apply to controlled companies established in an EU member state or in an EEA state that allows for an effective exchange of information with Italy (i.e. Norway and Iceland).
To avoid the CFC rule, an Italian resident taxpayer must prove that:
The CFC rule also applies to controlled companies resident or established in an EU member state, Norway or Iceland when both of the following conditions are met.
CFC income is taxed at the level of the Italian resident corporate shareholder at the standard CIT rate of 24 percent.
The 2018 Budget Law amends the tax treatment of dividends paid, directly or indirectly, by a CFC that passes the business test. The new law provides that 50 percent of such dividends are excluded from the taxable income of the Italian resident corporate shareholder (before this amendment, 100 percent of dividends were taxable).
Under certain conditions, the Italian resident shareholder may benefit from a foreign tax credit for income taxes paid by the CFC.
A transaction may constitute abuse of law if it has no economic substance and is essentially aimed at obtaining undue tax savings. Even if it is formally compliant with Italian tax law, a transaction will be abusive if it is at odds with the purposes of the provisions and/or the principles of the Italian tax system.
A transaction has no economic substance if it involves facts, acts and agreements (even interconnected ones) that have no significant effects other than tax savings or, in general, tax advantages. Transactions cannot be defined as abusive if they are justified by sound business reasons; these reasons include shake-ups or management decisions to improve the structure or operations of a business.
The taxpayer is allowed to submit an application for a tax ruling on whether a transaction constitutes unfair tax behavior.
Dormant company rule
A company is deemed to be dormant if, in a fiscal year, its revenues are lower than the sum of the following items:
If the vitality test is not passed, the company’s minimum taxable income is deemed to be the sum of certain specific items. A dormant company may carry forward its tax losses but it can only offset them against the portion of its income that exceeds the minimum taxable income.
If a company is considered as dormant, a higher IRES rate of 34.5 percent is applied to a notional income computed on the basis of the assets recorded in the company’s balance sheet. In a tax group, the notional income cannot be offset against losses of other group companies.
A calculation similar to the vitality test is used for IRAP purposes. Other limits also apply for VAT purposes.
An entity is also considered as dormant in a fiscal year if it has had tax losses in 5 consecutive previous years
Certain exemptions may apply.
Companies are allowed to apply for a tax ruling and to give evidence of the circumstances that have prevented them from passing the vitality test.
In 2017, measures were introduced to define the Italian taxation of carried interest, which is a form of remuneration granted to managers and employees who hold shares, quotas or financial instruments with ‘strengthened’ economic rights.
Carried interest is granted to managers and employees of investment companies and private equity firms in order to align their interests with those of other investors.
The new tax rule treats carried interest as capital income rather than employment income if the following requirements are met:
Advantages of an asset purchase
Disadvantages of an asset purchase
Advantages of a share purchase
Disadvantages of a share purchase
Studio Associato Via Vittor Pisani 27 Milano
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1 Or a business unit — the rules on asset deals are the same for the acquisition of a business (azienda) and a business unit (ramo d’azienda).
2 Qualifying shares in unlisted companies represent more than 20 percent of the voting rights or 25 percent of the stated capital. Qualifying shares in listed companies represent more than 2 percent of the voting rights or 5 percent of the stated capital.