Tax incentive for equity increases (ACE)
In Italy, up until the 2023 tax year, the ACE tax incentive was available. This allowed companies applying double-entry bookkeeping to claim an additional deduction from their taxable income, based on the increase in equity compared to 31.12.2010. For the calculation of the equity increase, both retained earnings and capital contributions, including shareholders’ contributions to cover possible losses, could be considered. The equity increase was multiplied by a notional interest rate of 1.3%, and the resulting amount could be deducted from the taxable income base. Limited to the year 2021, an alternative to ACE was introduced: the Super-ACE. Further details can be found below.
Super ACE
Introduced as part of Covid-19 support measures, it allowed taxpayers eligible for ACE to apply, on the equity increase of 2021, a special deduction of 15% from the 2021 taxable income base. The benefit was subject to the condition that the 2021 equity increase could not be withdrawn in the following two years, 2022 and 2023.