Among the less conspicuous but more practical measures introduced by the Omnibus Decree—the fourth corrective decree implementing the tax reform enabling law, currently under review by the Chamber of Deputies—Article 18 stands out. It applies to all non-resident entities carrying on business activities in Italy through a permanent establishment (PE/branch), regardless of their size or business sector.

Compared with an Italian-incorporated subsidiary, a branch remains a widely used option, as it allows a foreign entity to operate in Italy without establishing a separate legal entity. Precisely because it is not a distinct legal entity, the PE does not prepare its own annual financial statements for approval and filing with the Chamber of Commerce. The only official financial statements are those of the head office, which are often of limited relevance to the Italian tax authorities.

To address this limitation, Article 152 of the Italian Income Tax Code (TUIR) requires the branch to prepare a statement of profit or loss and financial position solely for tax purposes, applying the accounting principles that would be used by a comparable resident entity. Although it does not constitute a separate set of statutory financial statements, as it is not subject to a shareholders’ approval process, it substantially mirrors such statements and may be prepared in accordance with either IAS/IFRS or Italian accounting standards.

The Omnibus Decree now introduces two requirements in relation to this statement. First, it must be given a legally verifiable date—through a qualified electronic timestamp or an equivalent method—by the deadline for filing the income tax return for the same tax period, thereby formally establishing and preserving its contents. Second, the figures reported in the statement must also be entered in a dedicated schedule included in the tax return, making them directly available to the Italian tax authorities without the need for a separate request.

Nothing changes for the 2025 tax period: the tax returns due to be filed in October 2026 will remain subject to the current rules. The new requirements will apply from the 2026 tax period onwards.