(Bloomberg) -- Italy is mulling extending the fiscal benefits for banking mergers and acquisitions it introduced at the end of last year, according to a draft decree seen by Bloomberg.
The move could further entice potential buyers of state-owned Banca Monte Paschi di Siena SpA, which Italy must sell before the end of 2021 as part of an agreement with the European Union.
The preliminary draft, which is still under discussion and subject to change, raises the tax relief for buyers from 2% to 3% of assets. It also pushes back by six months, to June 2022, the deadline to make use of the relief.
The benefit was introduced last year to make loss-making banks more attractive for acquisition. It allows buyers to boost their capital by transforming deferred tax assets from the purchased bank into tax credits.
While the tax relief measure doesn't have a specific target, it was part of a package of incentives put together by Giuseppe Conte's government to lure UniCredit SpA into buying Paschi, which was rescued by a state bail-out in 2017.
Milano Finanza reported the extension earlier on Tuesday.
Talks between the two banks stalled earlier this year with the exit of Chief Executive Officer Jean Pierre Mustier, which left the lender without a leader until Andrea Orcel took over on April 15.
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