On October 15, 2024 the Italian Ministry of Economy and Finance issued a decree on the substance-based income exclusion (SBIE) for global minimum tax compliance under Pillar Two. Key provisions include: (1) guidance on income exclusions based on substantial economic activity, aligned with OECD recommendations; (2) rules to reduce taxable income for companies and jointly controlled or stateless entities, within both multinational and national groups; (3) a 5% reduction on the average net book value of tangible assets at year start and end; and (4) provisions for calculating SBIE in leasing contracts involving qualified tangible assets.
To read more on the Decree, click here.