Italy Transfer Pricing Policy

Email: mxp4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak Italian English, and Chinese.
skype: burlinna

TP-Q-10
What kinds of scenarios will be adopted TP policy? What is the relevance between DTA and TP policy?

TP-A-10

When Italy Tax entity would like to pay out whatever Business profits, Royalty, Technical Services fees, Interests, Trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the Italy Treaty Page.
But if want to verify the above-mentioned amount if reasonable, will adopt Italy TP Policy.

TP-Q-20:            

What are the scenarios in Italy, that a Wholly Foreign-Owned Entity (WFOE) exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:

Local and Master File –

Optional to prepare.

Country-by-country (CbC) Report –

MNEs in Italy with annual consolidated group revenue less than 750 million Euros in the prior fiscal year.

TP-Q-30:            

What are the scenarios in Italy, that a Wholly Foreign-Owned Entity (WFOE) required to submit TP declaration to country’s tax bureau? What is the name of the TP declaration form?

TP-A-30:

No TP declaration required.

TP-Q-40:            

What are the scenarios in Italy, that a Wholly Foreign-Owned Entity (WFOE) required to submit TP declaration and TP documentation to country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:

Local and Master File –

Mandatory for all Italian taxpayers that want to benefit from TP penalty protection regime.

Country-by-country (CbC) Report –

MNEs in Italy with annual consolidated group revenue equal to or exceeding 750 million Euros in the prior fiscal year.

Italy TRANSFER PRICING for professionals

Overview

Italy has implemented transfer pricing rules for related-party transactions.
Any transaction carried out between related companies, where one of the parties is Italian and the other is nonresident, must be done at arm’s-length values.
Legislative Decree No. 147/2015 clarifies that the arm’s-length value rules do not apply to transactions between residents or businesses located in Italy.

Associated enterprises

• An enterprise resident in the Italian territory as well as non-resident companies where
  1. One of them participates directly or indirectly in the management, control, or capital of the other, or
  2. The same person participates directly or indirectly in the management, control, or capital of both companies.
• Participation in the management, control, or capital means

1. A participation of more than 50% in the capital, voting rights or profit of another enterprise; or
2. The dominant influence over the management of another enterprise based on equity or contractual constraints.

Permissible Pricing method

*Comparable Uncontrolled Price method (CUP) (the most favored method)

*Resale minus method (generally adopted for trading companies)

*Cost-Plus Method (CPM) (adopted if the other two methods are not applicable)

The Italian regulations provide for specific rules for the adoption of each method.

The OECD Guidelines can be helpful, even if the Italian rules may sometimes differ.

Due dates and respective threshold:

In Italy, there are no specific TP returns nor mandatory reports to be prepared.

Please be aware of the below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Milan Evershine BPO Service Limited Corp.
Email: mxp4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak Italian, English and Chinese.
skype: burlinna

or
For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System, please send an email to HQ4mxp@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
LinkedIn address: Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
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Partner Kerry Chen, USA Graduate School and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

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