Italy has implemented an exemption from tax loss carry-forward restrictions for intra-group restructurings under Article 177-ter of the Income Tax Code, effective from 31 December 2024.
Italy’s Ministry of Economy and Finance has published the Ministerial Decree of 27 June 2025, which regulates the exemption from loss carry-forward restrictions for intra-group restructurings introduced under Legislative Decree No. 192/2024.
The Decree was published in Official Gazette No. 160 on 12 July 2025.
The exemption, codified in Article 177-ter of the Income Tax Code, provides that the general limitations under Articles 84, 172, and 173 concerning the carry-forward of tax losses do not apply to qualifying business restructuring operations—such as mergers or transfers of participations—conducted within the same corporate group.
The exemption applies to:
- Losses incurred during tax periods in which the entities involved were already members of the same group; and
- Losses from earlier periods that had been subject to loss carry-forward restrictions when the entities entered the group or thereafter.
The Decree outlines the conditions for determining group membership and specifies how various categories of losses are to be treated. It also sets out coordination rules to ensure compatibility with other provisions limiting intra-group loss carry-forwards.
Additionally, the exemption extends to the carry-forward of excess non-deductible interest expense and excess allowance for corporate equity (ACE).
The new rules took effect alongside Legislative Decree No. 192/2024 on 31 December 2024.
