Choosing the Right Avenues for tax Submission will Not Be a Problem

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At the end of a financial year, the accounts do not always end even. The cases in which the negative income components pertaining to the period exceed the positive ones are indeed very frequent, also due to the prolonged economic crisis that has spared no one both nationally and internationally. This leads to a loss of corporate wealth, but from the point of view of contributions a negative outcome of the tax period also means the inability to finance public spending. To deal with this problem, the possibility was therefore born of carrying the loss suffered to subsequent periods.

But what exactly happens if the financial year ends with a loss? And how is the extent of this loss determined? Finally, what are the different cases? In this article we answer all these questions. The tax return calculator comes up with great value in such calculations.

Carryover Regulations

Essentially, in order to calculate the amount of the loss in question, it is necessary to subtract the negative components of accrued income from the positive components of accrued income.

Legislative Decree amended paragraphs 1 and 2, regarding the carry-over of tax losses

Specifically, this discipline involves IRES subjects, i.e. joint stock companies, commercial entities and permanent establishments of non-resident subjects. Essentially, the new amendment has widened the tolerance of the previous terms, providing that the tax losses incurred in one tax period can be calculated as a decrease in the income of subsequent periods.

Capital company

Capital companies have an ordinary accounting regime whereby the tax losses that the company incurs in the tax period can be recognized with a deduction from the income of the following periods. This can happen in two different ways:

  • The losses of the first three financial years (the date of which starts from the day of incorporation) can be carried forward without time limits in relation to the part that exceeds the income earned in the subsequent periods. They are also compensable for the entire amount that is contained in the operating income.
  • Losses starting from the fourth tax period from the commencement of business can be carried forward for the full amount without time limits and offset for no more than 80% of the taxable income of each tax period.


Circular no. 25 of 19 June 2012 issued by the Revenue Agency establishes that there is no order of priority for losses in the first three financial years (which are therefore to be reported in full) and not even for those created later (subject to an 80%).

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