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Freshfields Sustainability

| 2 minutes read

Italian benefit companies: a tax tool for sustainability

Governments are increasingly using tax structuring methods to encourage companies to achieve more ambitious sustainability goal. 

In this article, we discuss the tax regime applicable to a new corporate entity ('benefit company') recently enacted by the Italian government that could facilitate the achievement of these sustainability aims in a tax-efficient manner.

Social enterprises across the world 

The Italian legislation on benefit companies is inspired by the US benefit corporation, which reflects a growing trend of carrying on business activity in a more transparent and responsible manner to a broader group of stakeholders beyond just shareholders. 

These are companies (also known as 'B Corps') that generate profits and at the same time undergo a valuation procedure – the benefit impact assessment – with a view to measure their impact on stakeholders and obtain a certification of their commitment towards stakeholders.

Another example is also found in the UK, where a special type of limited company may be set up (so-called community interest companies or CICs) with a view to benefit the community more broadly than just shareholders.

Italian corporate-law framework

The Italian corporate-law framework adopts a similar approach to the US and the UK of providing a clearly stated additional purpose to the entity. Benefit companies are incorporated under ordinary Italian forms (eg SpA, Srl, etc) and:

  • carry on a business activity for the benefit of shareholders; and, at the same time,
  • pursue 'common benefits' operating in a responsible, sustainable and transparent manner.

The business purpose of benefit companies shall clearly indicate the common benefits intended to be pursued.  

Benefit companies are also required to include in their corporate name the acronym 'SB' (Società Benefit).

Tax status of benefit companies

Italian benefit companies are subject to corporate income tax (the ordinary rate is 24 per cent) and regional tax (the ordinary rate is 3.9 per cent).

They are VAT-able entities entitled to fully recover VAT credit to the extent selling goods or services subject to VAT.

Italian tax laws do not currently provide for favourable tax regimes, but such companies could be entitled to apply certain favourable tax treatments, depending on their business purpose (see below).

Certain tax aspects

Equity contributions made by shareholders to benefit companies will not generate taxable income in the hands of the benefit companies.  

Gifts made by third parties to benefit companies are taxable for corporate income tax and regional tax purposes.

Costs incurred by benefit companies to pursue common benefits (eg sustainability goals) should be fully deductible for corporate income tax and regional tax purposes as they relate to the core activity of the company. 

Limits applicable to the deduction of charitable donations made by ordinary companies will not apply to benefit companies.


We expect the benefit company to be an attractive choice for many companies. Adopting this structure may strengthen a company’s reputation and may facilitate its pursuit of sustainability objectives as:

  • directors are allowed to include common benefits in their strategic choices without being exposed to potential shareholder claims; and
  • benefit companies can fully deduct costs incurred in pursuing common benefits without being subject to limitations applicable to ordinary companies.


europe, corporate governance