Italy: Tax dispute resolution mechanisms, new mutual agreement procedures

Italy: Tax dispute resolution mechanisms

A legislative decree (no. 49/2020 (10 June 2020)) implements Council Directive (EU) 2017/1852 regarding tax dispute resolution mechanisms and in particular disputes arising from the interpretation and application of tax treaties—including the elimination of double taxation in connection with the adjustment of profits of related or associated enterprises.

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The decree will apply to any request for a mutual agreement procedure (MAP) submitted from 1 July 2019 onwards, in relation to disputes about the tax treatment of income or capital earned in a fiscal year commencing on or after 1 January 2018.

The scope of the new MAP is much broader than that envisaged in the Arbitration Convention in that the new MAP rules apply to any situation when double taxation arises from the violation of tax treaties between EU Member States. Therefore, while the Arbitration Convention only applies to transfer pricing issues, the new MAP is expected to cover other areas such as permanent establishment assessments and disputes over withholding taxes applied in breach of treaties.

If a MAP request is filed abroad and the case concerns Italy, a MAP request must also be filed in Italy at the same time (and in Italian). The competent authorities can set up bilateral standing committees to speed up analysis of MAP cases.


Read a June 2020 report [PDF 178 KB] prepared by the KPMG member firm in Italy

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