The revaluation of company shares is an operation of significant interest for those intending to sell shares and who do not carry out business activities. With the introduction of the 2025 Italian Budget Law (Legge di Bilancio=, the opportunity to reassess the tax cost of land and equity investments at a rate of 18% has been made permanent. This applies to corporate entities, individuals, simple partnerships, non-commercial entities, and non-residents.
In this article, we present an analysis of the new provisions, considering how they will influence the tax and asset management strategies of those affected.
1. WHAT CHANGES WITH THE REVALUATION OF SHARES IN 2025 ↑
Starting in 2025, investors holding company shares outside of commercial business activities will benefit from a key development introduced by the latest Budget Law. This law consolidates the “special” regime for revaluing equity investments, allowing companies to update the tax value of their shares and owned land at a favourable tax rate set at 18%. This measure was already part of Italian legislation but had previously been renewed annually with varying tax rates. With the Budget Law, the regulation becomes permanent, removing the uncertainty associated with annual renewals.
The revaluation is particularly advantageous, as it allows the purchase value of assets (shares and land) to be updated on 1 January of each year.This enables holders to potentially reduce the tax burden on capital gains realised from the sale of assets, which under the “ordinary” regime would be subject to a 26% tax rate. Choosing between the two regimes is entirely optional and should be based on economic convenience. It should be noted that the substitute tax (18%) is calculated on the entire value established by appraisal, whereas the capital gain is taxed at 26% only on the difference between the sale price and the fiscal book value.
Operational Details
Relevant parties must follow a series of steps as outlined by current regulations. Asset holders must comply with specific requirements by 30 November of the year in which they intend to apply the revaluation:
- For unlisted shares and land, an appraisal must be obtained from a qualified professional (a chartered accountant registered with the appropriate body or a statutory auditor listed in the official register).
- The substitute tax, amounting to 18% of the value established in the appraisal, must be paid either in a single instalment or in three annual instalments, with interest of 3% accruing from the due date of the first payment.
To determine the economic viability of the operation and to produce an appraisal that can withstand any future scrutiny by the Italian Revenue Agency, it is advisable to seek guidance from tax and accounting experts who can navigate the complexities of the process and maximise the benefits of the revaluation.
Valuation Methods – Listed Shares
For listed shares, holders may choose to adopt the normal market value as the tax cost, calculated as the arithmetic average of market prices recorded in December of the previous year. This method simplifies the valuation process for listed equity investments.
2. IMPACT OF THE REVALUATION OF SHARES AND LAND ↑
The revaluation allows entrepreneurs to align the tax value of their assets with their current market value. Such an adjustment can result in reduced capital gains tax in the event of a sale, thereby improving tax efficiency.
Consider the sale of a limited liability company shareholding for €500,000, with a tax base of €10,000 due to its initial constitution through paid-up share capital only:
- Under the “ordinary” regime, capital gains tax would apply at 26% on the €490,000 gain, resulting in a tax liability of €127,400.
- Under the “special” revaluation regime, a substitute tax of 18% would be levied on the appraised value, equal to the sale price of €500,000, resulting in a tax liability of €90,000.
The tax saving in this example is clear: €37,400.
3. REVALUATION OF A PREVIOUSLY REVALUED VALUE ↑
It is important to note that a shareholding previously revalued may be revalued again. In such cases, a new professional appraisal must be carried out and the substitute tax of 18% paid on the new appraised value. However, it is possible to deduct from the new tax any amounts already paid in relation to prior revaluations (even if only two instalments, for example, were paid).
