Italy plans six-month extension of tax breaks for business mergers

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ROME – Italy plans to extend by six months until the end of this year the tax breaks for business mergers that Rome had initially introduced in 2021 to attract buyers of the public company Monte dei Paschi di Siena, have two sources familiar with the matter told Reuters.

After a plan to sell Monte dei Paschi to UniCredit failed, the Treasury introduced a 500 million euro ($535 million) cap that one of the sources said would remain in place in the extension.

In their current form, the tax benefits allow companies to pay a fee to convert deferred tax assets (DTAs) resulting from past losses into tax credits in the event of merger transactions approved by directors or shareholders. by June 30, 2020.

Earlier this year Italy’s fifth-largest bank BPER Banca agreed to buy struggling rival Carige, in a deal that is expected to have a neutral impact on its capital reserves thanks in part to tax incentives.

Carlo Cimbri, CEO of Italian insurer Unipol, which is BPER Banca’s largest shareholder, said on Tuesday he expected the Carige deal to be completed by the end of this year.

The French Crédit Agricole also benefited from the tax regime when taking over the regional bank Creval in 2021.

(Reporting by Giuseppe Fonte and Valentina Za; Editing by Angus MacSwan)

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