Under the special SIIQ regime, a company defined as an SIIQ (similar to a real estate investment trust or REIT), pursuant to Law 296 of 27 December 2006 (as amended) and Ministry Decree 174 of 7 September 2007, can exclude income from rental and similar activities for the purposes of IRES (corporate income tax) and IRAP (regional business tax).

On 16 April 2008, IGD SIIQ SpA, which meets the subjective, ownership and statutory requirements, opted for this special status.

At 31 December 2008 it had also satisfied the financial and earnings parameters set by law and had thus met the objective requirements.

In demanding that property rentals and the equivalent (known as "exempt operations") be the prevailing factor in a company's income statement and balance sheet, SIIQ rules do not require that they be its sole activity.

IGD SIIQ SpA has and does maintain marginal operations other than property rental and the equivalent ("taxable operations").

Income from taxable operations has been subject to the standard rules of computation and taxation, while the rules stated in paragraphs 119 et seq. of Law n. 296 of 27 December 2006 and in its implementation decree have been followed for income from exempt operations.

To distinguish the operating results subject to different accounting and tax treatment, in accordance with paragraph 121 of Law 296/06, IGD SIIQ SpA has kept separate accounts for exempt rental operations and taxable marginal operations.

In keeping with the accounting standards, income from exempt operations includes revenues and costs typical of the property rental business, as well as those typical of operations considered to be equivalent. Likewise, revenues and costs stemming from the company's remaining activities have been allocated to taxable operations.

In accordance with paragraph 121 of Law n. 296 of 27 December 2006 and with the recommendations contained in Revenue Office Circular 8 of 7 February 2008, general, administrative and financial costs that cannot be directly attributed to exempt or taxable operations or allocated on the basis of objective parameters have been split according to the ratio of exempt revenues to total revenues.

As for properties (owned or held on the basis of real property rights) forming part of rental package deals, the accurate and objective representation of the portion of fees pertaining to the real estate itself has been ensured by making the exempt/taxable allocation on the basis of expert appraisals that quantify the fair value of fees pertaining to rent.

Likewise, the costs common to package deals as a whole (such as shopping center promotion and advertising costs) have been allocated to exempt and taxable operations in the same proportions used for rent. In this specific case, such a policy was thought to be more representative than an allocation based on the company's total revenues. Since these costs relate directly to the package deals and not to IGD SIIQ SPA's operations as a whole, their correlation with contractual fees is immediate and objective.