Deducibility of interests payable
Interest payable and assimilated charges other than capitalized costs can be deducted in each tax period, up to the limit of the interest receivable and assimilated revenue.
Any excess of interest payable can be deducted up to 30% of the EBITDA plus cost of financial leases (so called costs). Any further excess cannot be deducted during the taxation period, but can be carried forward and eventually deducted in later periods, on the condition that the 30% of the ROL relevant to each financial year is higher than the difference between the total interest payable plus assimilated costs and the total of interest receivable and assimilated revenue.
On the other hand, any excess of the above ROL can be carried forward in later periods in order to offset any excess of interest payable.
In order to apply the system described, interest payable and interest receivable, assimilated costs and revenue from the following are taken into consideration: mortgage; contract; financial lease contracts; issue of bonds and similar and any other contract for financial reasons.
Implied interest coming from debts is excluded however, while interest receivable from payments of the same nature can be included.