First of all, a new definition of interest is provided. More specifically, interest payments and interest income include:
- interest qualifying as such under the accounting principles and confirmed as such under current tax provisions;
- deriving from a transaction or a financial relationship or a relationship with a significant financing component.
The limitations under section 96 of the Italian Tax Code (TUIR) are extended also to:
- interest payments included in the cost of assets under section 110 (1b) of the Italian Tax Code (TUIR),
- interest payments for mortgage-backed loans on properties rented out .
Under certain conditions, however, the limitations under section 96 of the Italian Tax Code (TUIR) do not apply to interest payments relating to loans used to finance long-term public infrastructure projects under the Italian legislative decree 50/2016, chapter V.
Moreover, it is confirmed that the limitations under section 96 of the Italian Tax Code (TUIR) do not apply neither to financial intermediaries (as defined under the new section 162-bis of the Italian Tax Code) nor to interest paid by insurance companies and parent companies of insurance groups, which are deductible at 96 percent of their amount.
Interest payments and similar financial charges (hereinafter referred to shortly as "interest payments") are deductible in each tax period up to the amount of interest income and similar financial income (hereinafter referred to shortly as "interest income").
If interest income exceeds the interest payments, any interest income in excess may now be carried forward to subsequent tax periods. Hence, as of subsequent tax periods, interest payments shall be deductible up to the amount of interest income not only of the current tax year but also of previous tax years.
In addition, interest payments exceeding interest income may be deducted up to the limit of 30 percent of EBIT generated from ordinary business activities in the tax period. Any contingent interest payments in excess - compared to interest income and the 30 percent limit of the current tax period - are deductible up to the limit of 30 percent of EBIT carried forward in the five previous tax periods, starting from the most recent one (previously, however, there was no time limit for EBIT to be carried forward).
EBIT is confirmed to equal the difference between income and expenses from ordinary business activities (items A and B under section 2425 of the Italian civil code, except for item no. 10 letters a) and b), and lease payments for capital goods). Nonetheless, it is now supposed to equal the EBIT amount calculated to determine business income. Furthermore, extraordinary components from business transfers are no longer excluded from EBIT.
Finally, interest payments that exceed interest income and 30 percent of EBIT, regardless of whether they belong to the current year or are carried forward, may be deducted in subsequent tax periods up to an amount equal to the difference between: 
- interest income of the tax period and 30 percent of EBIT,
- interest payments of the tax period.
In the event of group taxation, interest payments in excess that cannot be deducted by the consolidated company may be deductible from group income, if and limited to the extent in which the other consolidated companies report
- EBIT in excess and/or
- interest income in excess,
in the same period, or even related to previous financial years, and provided that such amounts were generated under the domestic or worldwide group taxation regimes.
Finally, please note that the EBIT (<<book value>>) of the tax period as of 31 December 2018 may be used in order to deduct interest payments incurred for loans concluded before 17 June 2016 only, provided that the term or the amount borrowed have not been modified after such date. More specifically, such interest is deductible for an amount equal to the sum resulting from:
30 percent of EBIT generated as of the third tax period after 31 December 2017 and, provided that it has not been used for interest payment deduction under section 96 of the Italian Tax Code (TUIR) previously in force at the end of the tax period as of 31 December 2018.
the amount deductible under the revised section 96 of the Italian Tax Code (TUIR).
 Please be advised that the Italian Budget Law 2019 is effective as of 1 January 2019 (Law no. 145 as of 30 December 2018 published in the Official Gazette of the Republic of Italy no. 302 as of 31 December 2018) set forth as follows: <<Due to the failure to adopt the revised provisions on direct and indirect taxation of real estate companies, the provisions …>> under section 1 (36) of the Italian law 244/2007 <<.. apply and remain in force unchanged>>. Hence, interest payments for mortgage-backed loans on real estate properties rented out continue to be excluded from the provisions under section 96 of the Italian Tax Code (TUIR).
 In order to calculate EBIT:
- income and expenses recorded in the profit and loss account as of 31 December 2018 or of previous business years which (i) were included in order to calculate EBIT of the year in which they were recorded and (ii) at the end of the business year as of 31 December 2018 have not become fiscally relevant yet and will become fiscally relevant in subsequent business years, are not taken into account;
- income and expenses recorded in the profit and loss account of business years subsequent to 31 December 2018 that represent an adjustment with opposite sign of income and expenses recorded in the profit and loss account as of 31 December 2018 or of previous business years are deemed to equal their book value, regardless of the value obtained under current tax provisions.
 These provisions also apply to interest payments which have not been deducted at the end of the tax period as of 31 December 2018 due to the provisions under section 96 of the Italian Tax Code previously in force.