National consolidation

The national consolidation system is available to two or more companies linked through a majority shareholding, that is, greater than 50%, calculated either directly or indirectly (for example, A owns 80% of B and B owns 70% of C; A and C can consolidate, because 80% of 70% equals 56%). This is not obligatory, though, because national consolidation is optional and each of the companies within a group is free to choose whether or not to consolidate. However, once the consolidation system has been chosen, the option is irrevocable for three years. A particular feature of national consolidation is that taxable incomes are added together in their entirety, no matter what the participation amount is - the economic relationships between the two companies can be dealt with separately. The national consolidation system is only available to companies resident in Italy, with identical taxable periods. Nevertheless, the controlling company may be based abroad, as long as it has a permanent establishment in Italy.