Investment in Italy

4. Accounting and reporting 314.1 Legal framework and regulations 314.2 Requirements 314.3 Compulsory bookkeeping 314.3.1 The general ledger 314.3.2 The inventory ledger 324.3.3 Business correspondence 324.4 The language of accounting records 324.5 Keeping accounting records abroad 324.6 The financial statements 334.7 International accounting standards (IAS/IFRS) 334.7.1 Differences between local GAAP and IFRS 354.8 Due dates for filing the year-end accounts and tax returnsand for making tax payments 374.8.1 Year-end accounts 374.8.2 Tax returns and tax payments 384.9 Failure to keep accounting books and records properly 395. Taxation of business income 405.1 Corporations 405.1.1 Tax residence 405.1.2 Rates 405.1.3 Determination of taxable income 405.1.4 Tax losses 435.1.5 Tax treatment of dividends and capital gains/losses 435.1.6 Withholding taxes 445.1.7 Tax consolidation 455.1.8 Consortium relief 455.1.9 Deduction of interest expenses 465.1.10 General anti-avoidance tax rules 465.1.11 Specific anti-avoidance tax measures 46© 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.