Higher incomes and previous losses carried forward
The resolution nr. 4 of March 21st, 2019 of the Italian Revenue Agency provides clarifications about the use of previous losses in case of higher taxable incomes resulting from tax assessments.
In case previous losses carried forward are deducted in tax returns for an amount below the limit, equal to 80% of the taxable income for losses not concerning the first 3 years of a company, the taxpayer can deduct the remaining losses from the higher income valued in the tax assessment.
The scope of the Italian Revenue Agency is to recover the original situation that would have occurred if the taxpayer declared the correct income from the beginning. Actually, the taxpayer would have deducted previous losses from the taxable income for a higher amount, with respect of the limits.
These provisions are valid also for fiscal losses resulting from the consolidated tax return; in these cases, the consolidating company can ask previous losses to be deducted from the higher taxable amount assessed through the electronic filing of the so-called “IPEC” form.
Furthermore, the resolution regards the possibility to recalculate the credit for taxes paid abroad to be deducted from the higher tax assessed. The higher deduction must be approved in the tax litigation.