Answer ... Two different tax consolidation regimes are optionally applicable in Italy:
- a domestic consolidation regime, including only Italian controlled companies; and
- a worldwide consolidation regime, including both Italian and foreign controlled companies.
In both cases, the tax group determines a single taxable basis for corporate income tax (‘Imposta sul Reddito delle Società’) purposes, determined the sum of the taxable bases of the companies included within the tax consolidation perimeter. In this respect, while the domestic tax consolidation regime implies that not all Italian subsidiaries must be consolidated (‘cherry-picking’ mechanism), the worldwide tax consolidation regime implies that all subsidiaries must be consolidated (‘all-in’ mechanism).