Loss-generating contributions: the Omnibus corrective decree clarifies the tax value of the shareholding received

With the corrective Omnibus Legislative Decree, currently under review by Parliament, the legislator is once again intervening on the rules governing contributions of shareholdings that generate a capital loss, as regulated by Articles 175, paragraph 1-bis, and 177, paragraph 2, of the Italian Income Tax Code (TUIR).

The aim is to resolve an interpretative uncertainty that arose following the 2024 reform, concerning the tax value to be attributed to the shareholding received by the contributor when the contribution generates a capital loss.

The current legislation provides that the “controlled realization” regime also applies when the realization value (i.e., the net equity increase recorded by the recipient company as a result of the contribution) is lower than the tax cost of the contributed shareholding. In such a case, the deductible capital loss is equal to the difference between the tax cost and, depending on the circumstances, the higher of the realization value and the fair market value.

However, the tax value of the shareholding received in exchange remained uncertain. In the absence of an explicit provision, it was generally considered that this value corresponded to the amount used to calculate the deductible capital loss. Assonime, however, had pointed out that the wording of the provision could support a different interpretation, according to which the relevant amount should have been the “pure” realization value, i.e., the accounting value, resulting in a more disadvantageous outcome for the taxpayer.

The corrective decree resolves this uncertainty by rewriting the rules for determining the realization value. If the ordinary realization value is lower than the fair market value as well, the “derogatory” realization value is equal to the lower of the tax cost and the fair market value. This amount is used both to calculate the deductible capital loss and to determine the tax value of the shareholding received.

Example: the tax cost of the shareholding is 150, the fair market value is 130, and the increase in the recipient company’s net equity (ordinary realization value) is 100. Since the latter is lower than both the tax cost and the fair market value, the derogatory realization value is 130 (the lower of the tax cost and the fair market value). The deductible capital loss will therefore be 20 (150 - 130), and the shareholding received will have a tax value of 130.

The new rules are expected to apply starting from the 2026 tax period, with limited retroactive effects for 2025 for taxpayers who have already filed their tax returns in accordance with the new interpretation.