Investment in Italy

Investment in Italy4.Accounting and reporting4.1Legal framework and regulationsAccounting and reporting are mainly regulated by the following laws and regulations:• the Italian Civil Code• Italian Tax Codes• Italian Accounting Standards (local GAAP)• International Accounting Standards/International Financial Reporting Standards, whereapplicable.4.2RequirementsItalian bookkeeping is based on double entries.Records must be made in chronologicalorder, without empty spaces or notes, and must not contain deletions; only where strictlynecessary can text be crossed through in such a way that the letters remain legible. Thegeneral ledger must report all transactions on a daily basis.As of January 2009 accounting books can also be kept on digital supports. Specificprovisions are in place to guarantee the true date of entries. All books and records, even ifcomputerised, must be kept for at least ten years after the date of the last entry, togetherwith all related business correspondence.4.3Compulsory bookkeeping4.3.1The general ledgerAll the transactions performed by an Italian company must be recorded in this ledger in detailand in chronological order. Each entry must show the date of the transaction and include abrief description. All entries must be made within 60 days of the relevant transactions.The general ledger must be consecutively numbered on each page, also showing the fiscalyear (e.g. 2009/1, 2009/2, 2009/3,….). Stamp duty (currently EUR 14.62) is due at thebeginning of each set of 100 pages.Local software is normally designed so that each entry in the general ledger is automaticallyrecorded in the VAT registers also.Amounts in foreign currency cannot be converted at an average monthly exchange rate,since it is compulsory for tax and legal purposes to adopt the official exchange rate valid onthe date of the transaction.Accounts must be closed and reopened at the end of the financial year. The general ledgermust be supported by ledger cards for each account (e.g. a ‘bank deposit account XXY’ledger card; a ‘cash 1’ account ledger card; a ‘client XYZ’ ledger card). All the transactionschronologically booked in the general ledger also have to be recorded in the ledger cards.© 2012 KPMG S.p.A., KPMG Advisory S.p.A., KPMG Fides Servizi di Amministrazione S.p.A., KPMG Audit S.p.A., Italian limited liability share capital companies, and Studio Associato Consulenza legale e tributaria, anItalian professional partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.31