Italy: Transfer pricing documentation guidelines (2020), replaces guidelines from 2010

Italy: Transfer pricing documentation guidelines (2020)

The Italian tax authority on 23 November 2020 issued new guidelines that fully replace the 2010 guidelines for the preparation of transfer pricing documentation.


The new guidelines implement a Ministerial Decree (14 May 2018) that established the rules for the practical application of the arm’s length principle.

A group company, or a branch of a foreign entity or an Italian company that owns a foreign branch, must prepare both a Master file and a Local (country) file. A previous distinction between group holding companies, sub-holdings of groups, and subsidiaries (used to determine the different levels of documentation required) has been replaced, and the same set of documents is now required for all taxpayers—regardless of the position of the Italian entity within the group.

Although the overall structure of the Master file and the Local file requirements appear to be in line with the OECD base erosion and profit shifting (BEPS) Action 13 guidelines, there are several differences in the Italian guidelines that require special attention. For example, there are specific items that must be included in the Master file.

KPMG observation

Certain elements of the Italian transfer pricing guidelines are expected to be helpful in assisting taxpayers preparing their documentation, whereas others will require more care. For instance, the guidelines recognize that certain omissions, when not material, may not affect the overall validity of the documentation.

Read a November 2020 report [PDF 160 KB] prepared by the KPMG member firm in Italy

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