Investment in Italy

Investment in Italy10.1.4 DemergerAs a general rule, demergers are tax-neutral. The demerged company can freely choosewhich assets and liabilities to contribute to the beneficiary.The tax neutrality of this transaction implies the following:• demerger differences (i.e. demerger deficits/surpluses) are disregarded for tax purposes(i.e. are not taxable/deductible). Therefore, the demerged and beneficiary companiesare not subject to corporate tax on any capital gains on the transferred assets. Certaindifferences were allowed for demergers implemented in 2007 and 2008• starting from the effective date of the demerger, certain tax items (e.g. tax deferralson capital gains realized in previous years, tax loss carryforwards) are transferred fromthe demerged company to the beneficiary in proportion to the net equity transferred. If,however, certain privileges and obligations (e.g. provisions for accelerated depreciation)are attached to particular assets or liabilities transferred to a specific company, they haveto be attributed to that company.In order to preserve the tax neutrality of reserves subject to tax deferral and included inthe net equity of the demerged company, the beneficiary company must create suchreserves after demerger, in proportion to the increase in its own net equity as a result ofthe transaction. Tax loss carryforwards of the demerged company can be transferred to thebeneficiary company in proportion to the net equity transferred to it, provided that - as inmergers - the vitality test and net equity test are met.While a demerger is generally a tax-neutral event, the step-up in the assets crystallisingupon the merger can be obtained subject to certain conditions. Demergers fall within thescope of the anti-avoidance provisions discussed in 5.1.5. Demergers are not subject to VAT.Registration tax of EUR 168.00 is due.10.2Going listed in Italy - OverviewCompanies registered in Italy may list their shares on one of the markets managed by BorsaItaliana. These markets can also be accessed by non-Italian companies through a primarylisting, if the company is not yet listed, or a ‘dual’ or ‘secondary’ listing if the company islisted on its national or other stock market. In the latter case, specific regulations applyto the foreign company. EU directives on financial markets and the admission of financialinstruments to public trading have been endorsed by the Italian Parliament and are fullyapplicable in Italy, e.g. the Prospectus Directive, and Markets in Financial InstrumentsDirective (MiFID).The main markets available in Italy for the listing of shares are the following:• Mercato Telematico Azionario - MTA: this is the main market in Italy. The MTAis divided into three segments: Standard, STAR and Blue Chip. Segments aredifferentiated principally by company size in terms of capitalisation (minimum marketcap of EUR 40 million for STAR, and EUR 1 billion for Blue Chip) and by corporategovernance requirements, which are more stringent for STAR. The MTA is a European© 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.91