Italy Tax Agency Clarifies Tax Treatment of Costs to Realize Tax-Exempt Capital Gains

The Italian Revenue Agency April 7 issued Answer No. 90/2025, clarifying the tax treatment of costs associated with the realization of exempt capital gains. The taxpayer, a listed company, held and managed a diversified portfolio of investments and shareholdings. The taxpayer introduced an incentive plan with bonuses distributed among beneficiaries based on its performance during liquidity events. The taxpayer sought clarification on the tax treatment of the specified bonuses paid or to be paid in the future, as well as whether the bonus remunerations paid to employees were fully deductible. The Tax Agency clarified that: 1) the costs associated with ...