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EU Approves Italian Tax Relief For Farm Cooperatives

By Todd Buell · October 15, 2020, 11:20 AM EDT

The European Commission approved an €8.5 million ($9.9 million) Italian plan to provide tax relief to agricultural cooperatives that have been hit hard by the coronavirus outbreak, the commission said Thursday.

A commission statement said this support would take the form of a favorable tax regime for the revaluation of assets by agricultural cooperatives.

According to Italian tax rules, companies can revalue business assets as part of their 2019 financial accounts. This involves paying a substitute tax of 12% on the increase in value, the statement said.

The Italian plan approved by the commission would allow agricultural cooperatives to offset up to 70% of their pre-existing losses to reduce the base for the calculation of the substitute tax, allowing them to benefit from a partial or total exemption from the substitute tax.

"The purpose of the measure is to ease liquidity constraints of agricultural cooperatives, to facilitate their access to finance and to mitigate the liquidity shortages that they are still facing as a result of the current crisis," the commission said.

The plan is valid until June 30, 2021.

--Editing by Vincent Sherry. 

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