Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61011
Authors: 
Panteghini, Paolo
Parisi, Maria Laura
Pighetti, Francesca
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Public Finance 3869
Abstract: 
This article describes the new ACE-type system implemented in Italy since 2012. We have first shown that this system reduces but does not eliminate the financial distortion due to interest deductibility. Using a dataset of Italian companies, we analyzed the impact of this relief on Italian firm capital structure. Despite the permanence of a tax advantage and its gradual implementation, the ACE relief is estimated to reduce significantly leverage. By decreasing default risk it is also expected to reduce systemic risk.
Subjects: 
ACE
business taxation
leverage
JEL: 
H25
H32
Document Type: 
Working Paper

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