Italy working on tax measure to help Monte dei Paschi tie-up-sources

ROME, Nov 12 (Reuters) - Italy is readying measures to facilitate corporate tie-ups through tax breaks, a draft document seen by Reuters showed, as the government strives to find a merger partner for ailing state-owned bank Monte dei Paschi di Siena.

Under the scheme, which is expected to be approved as part of the 2021 budget law, two companies merging during the course of next year would be able to lower their tax burden by using so-called deferred tax assets (DTAs).

The measure is aimed at facilitating the re-privatisation of Monte dei Paschi, two sources familiar with the matter said. The Treasury owns 68% of the bank following a 2017 bailout.

The document sets a ceiling for the tax benefit equal to 2% of the value of the assets of the smaller of the two companies merging.

For Monte dei Paschi this would mean an earnings boost of 2.9 billion euros ($3.4 billion) in the case of a tie-up with a bigger peer.

Monte dei Paschi has written off the value of its DTAs, meaning the buyer would also reap a capital boost, one of the two sources said. ($1 = 0.8477 euros) (Reporting by Giuseppe Fonte and Valentina Za, editing by Gavin Jones)