Italy: Budget bill includes proposed APA rollback mechanism, APA application fees

Italy: Budget bill includes APA rollback mechanism

The pending draft budget bill for 2021 includes measures that would amend the existing rules for advance pricing agreements (APAs).


Typically, advance tax rulings for multinational enterprises like APAs are designed to provide certainty about selected international tax issues—including transfer pricing, permanent establishment recognition and profit attribution, and the tax treatment of dividends, interest, and royalties.

Under the proposal, the effects of APAs could in certain circumstances be extended retroactively to include one or more fiscal years still open for assessment under the applicable statute of limitations. In addition, enterprises would only be able to access the APA process by paying a fee, the amount of which would vary according to the size of the multinational group to which the taxpayer belongs. The following chart lists the proposed APA fees.

Group turnover

Fee for APA

Equal to or less than €100 million


Equal to or less than  €750 million


Greater than  €750 million


The budget bill is currently being reviewed by parliament, and there are expectations that it could be passed by the end of 2020 but possibly subject to amendments during the parliamentary consideration.

Read a December 2020 report [PDF 161 KB] prepared by the KPMG member firm in Italy

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