In this article, the author comments on the Italian Allowance for Corporate Equity (ACE) regime, pursuant to which, subject to certain conditions, a portion of a company’s global income might benefit from a discount in respect of the payment of Italian corporate income tax and business regional tax. In particular, the author determines that ACE is not a hybrid mismatch instrument and discusses the extent to which it might lead to double non-taxation in light of BEPS Action 2.