Capital gains in business income: changes to spreading taxation in 2026
Law no. 199 of 2025 (the so-called 2026 Budget Law), in force from 1 January 2026, introduces significant tax changes, particularly a substantial revision of Article 86, paragraph 4, of the Italian Income Tax Code (TUIR). This amendment affects the rules on capital gains on assets, eliminating the general option to spread taxation and requiring taxation in full in the period of realisation. These provisions apply to all transactions carried out from 1 January 2026 (for taxpayers whose tax year coincides with the calendar year).
Abolition of generalised spreading of the taxation of capital gains
Replacement of the previous capital gains regime
Until 31 December 2025, the TUIR allowed the taxation of capital gains arising from disposals for consideration or compensation for the loss of or damage to assets to be spread over time. Taxpayers could choose to include the entire amount in the income of the financial year of realisation or in equal portions, up to a maximum of four, provided that the asset had been held for a minimum period, excluding cases covered by the participation exemption (PEX).
Paragraphs 42 and 43 of Article 1 of the 2026 Budget Law abolished this option. Consequently, capital gains on business assets, investment assets and shareholdings held as fixed assets (outside PEX) must be taxed in full in the year of realisation. This new rule applies to all capital gains realised from 2026 onwards.
The only permitted exceptions to the rule of taxation in full
The legislature has retained the option of spreading taxation (over a total of 5 tax periods) for two specific cases:
- Transfers of businesses or business divisions: The favourable regime is retained, provided that the holding period is at least three years.
- Professional sports companies: The option to spread the taxation of capital gains arising from the transfer of rights to the exclusive use of athletes' services is preserved, where those rights have been held for at least two years. However, spreading applies only to the portion corresponding to the consideration received in cash, while the remainder is taxed in full in the financial year of realisation.
Conclusions
This reform has an immediate impact on the calculation of advance tax payments for 2026, since the reference tax liability for the preceding period must be notionally recalculated under the new rules in Article 86, paragraph 4, of the TUIR. The legislature's objective is to bring forward tax revenue, but the implications for businesses are significant. The concentration of taxation into a single period eliminates the mechanism of spreading taxation, creating a mismatch where consideration is agreed to be paid in instalments or deferred. This forces the business owner to pay tax immediately on sums not yet received, making tax a determining factor that may influence business disposal decisions.
