Privacy Policy

Offer for Assistance on Transfer Pricing Issues

During 2020 transfer pricing rules, which were already introduced in 2010, were updated, providing a great opportunity in the field of transfer pricing for taxpayers that are part of multinational groups operating in Italy.

 What

In fact, preparing a specific supporting documentation, indicating the possession of such documentation within the terms and conditions prescribed by the new rules and delivering the same not later than 20 days after the request, the taxpayer could benefit from the non application of administrative penalties (in synthesis 70% of the additional tax assessed in Italy) in case of disputes and transfer pricing adjustment [1].

 How

The necessary conditions to apply for the non-application of administrative penalties are essentially four:

  1. Preparation of a specific supporting documentation (National Documentation and Masterfile), sufficient to permit the finding of compliance with the arm’s length value of the transfer prices charged
  2. Electronic signature by the taxpayer’s legal representative or his delegate with a timestamp to be appended by the date of submission of the income tax return
  3. Communication to the Financial Administration of the possessionof the documentation that must be performed:
    • with the submission of the tax return for each year (eg communication UNICO 2021 for the fiscal year 2020)
  4. Delivery of such documentation no later than 20 days after the request

 Why implement the documentation

  1. Tax audits on transfer pricing are becoming more and more recurrent
  2. In case of verification taxpayer must still prove the reasonableness of its transfer pricing, … with the additional penalty charge
  3. The non-application of administrative penalties has been confirmed by the experience over the years of application of the new rules
  4. It is a complex issue, inadequate to be discussed in a tax court

The experience over the years of implementation, once overcoming the initial scepticism of the first year, has confirmed the obvious advantage that the introduction of the above described rules has led to those taxpayers who have been able to develop, communicate and provide to the tax authorities an appropriate documentation. Although some of these taxpayers underwent tax audits with transfer pricing adjustments, they were generally able to benefit from the non-application of administrative penalties.

Considering that the tax audits have become more and more frequent, for multinational companies, and that the same are now focused mainly on the assessment of transfer pricing in place, the need to prepare such documentation is now uniformly recognized by companies and their respective tax advisors, having enough experience in international matters.

One of the most complex parts in the TP document implementation certainly is the economic analysis that should be included in the national documentation in order to support the transfer pricing applied. This analysis in fact requires, in addition to both a consolidated experience in the field and in international best practices, the availability of appropriate tools (databases etc).

For these reasons, considering the significant experience gained in the most prestigious multinational consulting firms by our network professionals, in the preparation of supporting transfer pricing documentation and relating economic analysis, we can address any problem in Transfer Pricing field: from the performance of economic analyses in support of Transfer Pricing, the preparation of functional analysis, to a full Countryfile and Masterfile Documentation.

To do so, please fill out the checklist of the preliminary information of the functions and risks undertaken by your company in order to make us understand your specific needs and find out how we can help you.

Do not hesitate to contact us for any further information regarding our services.

 

[1]. This opportunity, already introduced by Article 26 of Decree Law no. 78 of 31 May 2010 (converted with amendments by Law no. 122 of 30 July 2010), was subsequently amended by the Decree of the Minister of Economy and Finance of 14 May 2018 and further regulated by the measure of the Director of the Revenue Agency of 23 November 2020 and Circular no. 15 / E of 26 November 2021 of the Revenue Agency. For further information see Sector Regulations.