In October, the Italian Parliament passed Law No. 136. The provisions of the law affect the rules for applying the tax on windfall income. The document came into force on October 10.
According to Article 26(1) of the Law, taxable persons are Italian banks and Italian branches of foreign banking institutions licensed to carry out banking activities in the Republic, as defined in Article 1 of the Consolidated Banking and Credit Law. Other financial intermediaries (such as asset management companies or brokerage firms) will not be liable for taxes on excess profits.
Windfall tax will not be deducted from Italian direct taxes, including corporate income tax (IRES) and regional corporate tax (IRAP).
The upper limit is 0.26% of total assets. As an alternative to paying the windfall tax, banks may choose to defer an amount equal to or greater than 2.5 times the windfall tax to the retained earnings reserve instead of paying the tax in cash.