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Business income: five tax changes in the 2026 financial statements

Contract work, exchange differences, enhanced derivation, accounting errors, 2026 capital gains, losses after a change of control: changes and an example.

The reform has brought taxable income closer to the financial statements on a number of items and, together with the 2026 Budget Law, has tightened rules that weigh on cash flow. Five points matter for the 2026 financial statements: contract work in progress and exchange differences that follow the accounts, enhanced derivation (derivazione rafforzata) extended to micro-enterprises preparing abridged financial statements, correction of accounting errors within new limits, capital gains on individual assets that can no longer be spread over several years, and the carry-forward of losses on a change of control.

The framework

The sources are Legislative Decree no. 192 of 13 December 2024 and its corrective decree, Legislative Decree of 18 December 2025, also numbered 192. Subsequent amendments are indicated item by item.

• Contract work in progress and exchange differences, from the 2024 tax period for calendar-year companies (Art. 9 Legislative Decree 192/2024). Short-term contracts (lasting less than twelve months) measured in the accounts on a percentage-of-completion basis, and multi-year contracts measured on a completed-contract basis, where consistent with accounting standards, are treated the same way for tax purposes (Arts. 92, para. 6, and 93, para. 6, of the Consolidated Income Tax Act, TUIR). Exchange differences arising from year-end measurement are included in taxable income, as Art. 110, para. 3, has been repealed. Contracts still in progress at the end of 2023 remain subject to the previous rules (Art. 13, para. 3, Legislative Decree 192/2024).
• Enhanced derivation, from 2025 (Art. 3 Legislative Decree 192/2025). The qualification, timing and classification criteria laid down by accounting standards also apply to micro-enterprises that opt for abridged financial statements, in addition to those preparing ordinary financial statements (Art. 83, para. 1, TUIR).
• Accounting errors, for corrections made in the financial statements for financial years beginning on or after 1 January 2025 (Art. 83, para. 1-ter, TUIR; Arts. 4 and 7 Legislative Decree 192/2025). The correction is relevant for tax purposes in the year in which it is made only if all of the following conditions are met: a mandatory statutory audit (revisione legale), a non-material error, and a correction made no later than the approval of the financial statements for the year following that of the error and before the company has had formal notice of tax access visits, inspections or audits. For IRAP (regional tax on productive activities), the net value of production must also not be negative, in both the year of the correction and the year of the error, also when calculated without taking the corrected amounts into account (Art. 5, para. 5-bis, Legislative Decree 446/1997).
• Capital gains realised from 2026 (Law no. 199 of 30 December 2025, Art. 1, paras. 42 and 43): they are taxed in full in the year. Spreading over five years remains available only for the sale of businesses or business units held for at least three years and, for professional sports clubs, of rights to athletes’ services held for at least two years (Art. 86, para. 4, TUIR). The same limit also applies to insurance indemnities for the loss of or damage to assets (Art. 86, para. 1, letter b) and to the excess of indemnities received in subsequent years over the amount already taxed (Art. 88, para. 2).
• Losses, for transactions from the 2024 tax period (Art. 15 Legislative Decree 192/2024 and Decree-Law no. 84 of 17 June 2025). Where the majority of voting rights changes hands and the main business changes, losses may be carried forward only if the company passes the vitality test: revenues from the core business and employee costs with related contributions (Art. 2425 of the Civil Code) for the financial year closed before the transfer, or for the current year if the shares change hands in the second half of the period, must both exceed 40% of the average of the two preceding financial years (Art. 84, paras. 3 and 3-bis, TUIR). Once the test is passed, the carry-forward is in any case capped at the economic value of equity as determined by a sworn report (relazione giurata) referring to the same date, reduced by twice the contributions and payments received in the last 24 months, excluding public grants; failing the report, book equity applies, disregarding those payments (para. 3-ter). A change of control also occurs where the parent company is sold (Art. 7, para. 1, Legislative Decree 148/2026).

From 1 January 2027 these rules move into the consolidated income tax code (testo unico delle imposte sui redditi, Legislative Decree no. 117 of 19 June 2026), with different article numbering.

What changes in concrete terms

Losses and change of control. Beta srl (a limited liability company) has EUR 500,000 of tax losses at 31 December 2025. In March 2026 a new shareholder buys 70% of the shares and the company changes sector. In 2025 core revenues are EUR 450,000 and employee costs with related contributions EUR 180,000; the 2023-2024 averages are EUR 1,000,000 and EUR 400,000 (employee costs exclude fees paid to directors, freelance collaborators and agency workers). Both ratios stand at 45% and the test is passed. The sworn report values economic equity at EUR 350,000; the EUR 50,000 paid in by shareholders in the previous 24 months is deducted at double its amount, i.e. EUR 100,000. The cap is therefore EUR 250,000: half of the losses can no longer be carried forward. With 2026 taxable income of EUR 200,000, the losses offset 80% of it, i.e. EUR 160,000, and IRES (corporate income tax) is paid on EUR 40,000: EUR 9,600. With 2025 revenues of EUR 350,000 (35%) the test would not be passed and the losses could not be carried forward, unless a ruling request for non-application (interpello disapplicativo, Art. 11, para. 2, Law 212/2000) is filed, showing that, in the specific case, the avoidance effects cannot arise.

Capital gain on an industrial building. An srl sells an industrial building in 2026 for EUR 400,000, with an undepreciated tax cost of EUR 250,000. The capital gain of EUR 150,000 falls entirely in 2026: EUR 36,000 of IRES in a single year, instead of EUR 7,200 a year for five years. In calculating the 2026 advance payments on the historical basis, the 2025 tax is recomputed as if the new rule already applied (Art. 1, para. 43, Law 199/2025): companies that spread capital gains on assets in 2025 pay more.

In practice

• By the second advance payment in November 2026, companies that spread capital gains on assets in 2025 recalculate the historical advance under the new rule, or use the forecast method and keep the calculation worksheet.
• Before buying shares in a company with losses: the 40% test on the financial statements for the year closed before the transfer (or the current year, if the shares change hands in the second half of the tax period), compared with the average of the two preceding years, and a sworn report by a statutory auditor or audit firm (Art. 2409-bis of the Civil Code) referring to the same date (Art. 84, paras. 3, 3-bis and 3-ter, TUIR).
• In the 2026 financial statements, to be approved within 120 days of year-end, or 180 days if the articles of association so provide and particular needs so require (Arts. 2364 and 2478-bis of the Civil Code): material errors are described in the notes to the financial statements (nota integrativa); it is also advisable to document corrections of non-material errors, the only ones that can count for tax purposes in the year.

Mistakes to avoid

• Spreading a 2026 capital gain on a capital asset over five years.
• Giving tax effect to a correction where there is only a voluntary auditor: without a mandatory audit, the cost is recovered through an amended return (dichiarazione integrativa) for the year of accrual (Art. 2, para. 8, Presidential Decree 322/1998).
• Treating an error corrected through equity as non-material: it falls outside the rule.
• Running the vitality test on revenues alone, or including in employee costs expenses that do not relate to employment.
• Deducting shareholder payments only once: twice the contributions and payments of the last 24 months, excluding public grants, is deducted from the economic value.

References

Presidential Decree no. 917 of 22 December 1986 (TUIR), Arts. 83, paras. 1, 1-bis and 1-ter, 84, paras. 1, 3, 3-bis and 3-ter, 86, paras. 1 and 4, 88, para. 2, 92, para. 6, 93, para. 6, 110, para. 3 (repealed)

Legislative Decree no. 192 of 13 December 2024, Arts. 9, 13, para. 3, and 15

Decree-Law no. 84 of 17 June 2025

Legislative Decree no. 192 of 18 December 2025, Arts. 3, 4 and 7

Law no. 199 of 30 December 2025, Art. 1, paras. 42 and 43

Legislative Decree no. 148 of 7 August 2026, Art. 7, para. 1

Legislative Decree no. 446 of 15 December 1997, Art. 5, para. 5-bis

Presidential Decree no. 322 of 22 July 1998, Art. 2, para. 8

Law no. 212 of 27 July 2000, Art. 11, para. 2

Legislative Decree no. 117 of 19 June 2026

Civil Code, Arts. 2364, 2409-bis, 2425 and 2478-bis