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.
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
© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.