Federico Vincenti and Alessandro Valente of Crowe Valente/Valente Associati GEB Partners explore the complex relationship between Italy’s domestic tax dispute resolution mechanisms and OECD and EU directives on mutual agreement procedures.
Read MoreFederico Vincenti and Alessandro Valente of Crowe Valente/Valente Associati GEB Partners explain the rationale behind Directive (EU) 2021/2101 and what it means for MNEs.
Read MoreFederico Vincenti and Alessandro Valente of Crowe Valente/Valente Associati GEB Partners analyse the recent ruling that clarifies the most appropriate TP method for determining the arm’s length principle.
Read MoreIn recent years, this firm has assisted in an increasing number of tax audits related to transfer pricing matters, permanent establishment issues, and VAT fraud, among others. Considering this rise in audit activity, the Italian Tax Revenue Agency’s Circular No. 21/E that was published on June 20 2022 is a highly relevant document in providing additional guidance concerning tax audit activities for 2022.
Read MoreFederico Vincenti and Alessandro Valente of Valente Associati GEB Partners/Crowe Valente explain how Circular Letter No. 16/E will affect transfer pricing (TP) calculation in Italy.
Read MoreThe Italian Revenue Agency published a circular aimed at providing clarifications on the subject of transfer pricing (TP) documentation on November 26 2021. The circular took into account the comments made by professionals during the public consultation that ended on October 12 2021.
The purpose of the circular is to provide further operational instructions on the new features introduced by the regulation published on November 23 2020, regarding the suitability of the declaration which allows companies to make use of the penalty protection.
Published in: ITR (International Tax Review) - 9 December 2021
On September 20 2021, the Italian Revenue Agency (IRA) published the draft circular letter (the Circular) aimed at providing a vast range of clarifications on the transfer pricing (TP) documentation’s legal framework.
The Circular has been drafted to provide further operational instructions on the changes introduced by the Administrative Provision No. 360494 of November 23 2020 (containing the new rules on TP documentation).
The Circular was released for public consultation for comments and proposals. The consultation closed on October 12 2021.
One of the most significant changes concerns the obligation of digital signature with the time stamp of the master file and local file. Indeed, before the date of submission of the tax return for the relevant tax year (i.e. November 30 2021), the two documents must be digitally signed and temporally marked by the legal representative of the taxpayer or his delegate.
Published in: ITR (International Tax Review) - 21 October 2021
In a response to the disruption caused by the COVID-19 pandemic, governments have enacted unprecedented measures. As such, these measures may have an overwhelming impact on the tax residence of individuals and on the tax treatment applicable to income from employment.
On July 7 2021, the Italian tax authorities issued Ruling No. 458/2021 which deals with the tax treatment of workers that temporarily returned to Italy as a result of the COVID-19 pandemic and could not leave the country due to the travel restrictions enforced by China.
In the ruling, the Italian tax authorities were presented with a case involving a series of employees that were hired by the Italian parent company and seconded to the Chinese subsidiaries. Such employees moved to Italy in January 2020, as the pandemic broke out in China, and returned to China in July of the same year.
Published in: ITR (International Tax Review) - 27 July 2021
In early 2021, two decisions of the Italian Supreme Court dealt with the issue of certain inter-company transactions that were not performed according to the arm’s-length principle due to the existence of an overall advantage for the multinational group.
Published in: ITR (International Tax Review) - 28 april 2021
The mutual agreement procedure (MAP) is an instrument for the resolution of international tax disputes whenever a person considers that the actions of one or both of the contracting states’ tax administrations result or will result in taxation not in accordance with the provisions of a tax convention or of a tax treaty.
To this end, the MAP allows competent authorities designated from the governments of the contracting states to interact with the intent to resolve the international tax dispute. On October 10 2017, the Council of the European Union issued Directive (EU) 2017/1852 with the purpose of increasing tax certainty in the single market. With Legislative Decree No. 49/2020 published on June 10 2020, the Italian legislator approved the decree implementing EU Directive 2017/1852.
Published in: ITR Transfer Pricing Special Focus 2021 - 24 March 2021
Advance tax agreements are binding agreements between taxpayers and the Italian Revenue Agency aimed at enhancing tax compliance and promoting the business of multinational enterprises by providing certainty on international tax issues in advance.
The arrangements are based on mutual cooperation and transparency between taxpayers and the Italian Revenue Agency. An advance tax agreement may be requested by resident companies conducting international activities, meeting a set of requirements.
The 2021 Italian Budget Law modified the advance pricing agreement (APA) procedure, including new aspects about the ‘roll-back’ and providing the payment of a fee in order to start these procedures.
Published in: ITR Italy Special Focus 2021 - 16 March 2021
The 2021 Budget Law introduced significant innovations regarding advance rulings (including advance pricing agreements) provided for by Italian legislation (Article 31-ter of D.P.R. No.600/1973).
Through the instrument of advance rulings, companies with international business activities can enter into agreements with the Italian tax authorities, in relation to the following instances:
a) Prior definition of the transfer pricing methods applicable in intercompany transactions;
b) Exit or entry values in the event of transfer of residence;
c) Attribution of profits and losses to the permanent establishment in another country of a company resident in Italy or to the permanent establishment in Italy of a non-resident entity;
d) Prior assessment of the existence or otherwise of the requirements for a permanent establishment situated in Italy; and
e) Application to a concrete case of rules, also of conventional origin, concerning the payment or receipt of dividends, interest and royalties and other income components to or from non-resident parties.
Published in: ITR (International Tax Review) - 3 February 2021
During the course of tax audits, Italian tax authorities often challenge the value of the goods or services subject to intra-group relationships.
These disputes are particularly relevant for the Italian entity/company that carries out such inter-company transactions.
Should there be no coincidence between the declared assessments and the assessments made - based on Article 9 Testo unico delle imposte sui redditi (TUIR) - potential liability scenarios related to the crime of unfaithful declaration could open up.
Published in: International Tax Review (ITR) - 15 April 2020
New technologies have provoked a new revolution in human history: the so-called “digital revolution” or “next production revolution”. It marks the passage from the mechanical or analogue electronic technology to digital electronic technology, with primary impact on the area of communication but also, subsequently, in production.
It is revolution, because it has the capacity to overhaul established social structures.
In fact, it is already doing so: starting with business and trade, new technologies are now shaping labour, governance, culture.
The dominant trend is towards a global village: everyone and everything is a few steps – or rather a few clicks – away; cultures intermingle in an explosive mix, while national borders keep losing ground and relevance – mere remnants of a fading past.
This is where we are heading and each new development, e.g. every new platform, novel application, promising social network or innovative robot is one more (cyber-) brick for the construction of the global village.
Published in: Legal Perspective on Blockchain - Theory, Outcomes, and Outlooks
The EU’s digital single market serves as the framework for its efforts to exploit digital opportunities and achieve sustainable growth and development in the modern era. Some of the EU’s undertakings have sparked heated debates regarding their suitability for effectively pursuing their stated objectives.
This article examines two of these initiatives — the Telecommunications Single Market Regulation, adopted in 2015, and the recently proposed digital services tax (DST) — and the risks they may pose to the digital single market.
Published in: TAX NOTES INTERNATIONAL - October 15, 2018
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