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Italian road operators express concern about proposed tax measure

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ROME (Reuters) – Italian toll road operators have warned that a measure in this year’s budget that would limit tax deductions that can be claimed against amortisation costs for infrastructure assets could slow investment and lead to a possible legal challenge.

Under the new rule, motorway operators would only be able to deduct up to 1% of the value of investments on infrastructure projects like new toll roads booked on their balance sheets. At present, each year they can deduct the full amount of the value of the depreciation booked on the balance sheet.

“If the new rule in the budget law is approved, it would be impossible over the term of the concession period for motorway concession holders to deduct the costs sustained in developing infrastructure that will be handed over to the state for free at the end of the concession period,” the operators lobby AISCAT said in a statement.

The measure is included in the 2020 budget law which has been passed by the government but which still needs parliamentary approval.

The industry lobby said it considers the new rule could breach the Italian constitution, paving the way for future legal actions against the government.

Finance Minister Roberto Gualtieri denied the measure was aimed at punishing operators, who have been under increased scrutiny since the deadly collapse last year of a bridge managed by Atlantia <ATL.MI>. “It’s an absolutely sustainable adjustment, this isn’t a dramatic issue,” he said.

(Reporting by Stefano Bernabei; Editing by Kirsten Donovan)

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