Now let’s see how companies subject to IRPEF must act when they have to deduct operating losses. These companies are to be divided into two different categories, depending on whether they are active in simplified accounting or if they are in ordinary accounting.
Companies in simplified accounting
In this case it is not possible to carry out any operations to carry over losses: these can be used to directly reduce the total income, but only in the tax period in which they are realized. They can therefore be used for income deriving from the various categories that contribute to the formation of the total annual income.
Companies in ordinary accounting
For tax losses realized in the first three tax periods It is possible to carry forward the losses in subsequent years. Carryover is possible without time limits and for the entire amount.
For tax losses realized from the fourth tax period It is possible to carry forward the losses in subsequent years, but not beyond the fifth subsequent year. These losses can be used to reduce business income deriving from: commercial enterprises, participation in partnerships, and participation in transparent companies, within the limits of the limited amount.
When the losses are produced by Snc and Sas, as well as by the SS and associations that operate an exercise of art or profession, then they are attributed to the members or associates in proportion to the amount of their single share of the profits. In the event that the value of the aforementioned attributions is indeterminate, the shares in the profits are to be interpreted as equal.
As for the SAS, in the event of losses that exceed the amount of the share capital, the distribution of the excess share among the shareholders does not take place according to this general rule, but applies to the general partners. As a consequence of this, for limited partners the deductibility of the loss from the income is compared to the maximum value represented by the shareholding; instead the general partners, since they carry unlimited liability for the social obligations, are entitled to deduct the entire difference between the loss and the share capital.
Individuals exercising arts and professions, individually or in partnership
Whether they are in simplified accounting or in ordinary accounting, professionals cannot, however, report losses. However, the same can be used to decrease the total income (therefore to decrease different types of income). Using the tax return calculator is important in this case.
Minimum taxpayer scheme
Taxpayers who adopt the so-called “minimum taxpayer” regime, Legislative Decree, have the possibility to report the tax losses incurred from their business, art or profession activity for a period of five years. Even in the event that the taxpayer, in the meantime, has escaped from the advantage regime, this five-year carryover method of the loss of the minimum regime continues to be applied.