Italy: Country-by-country reporting approved - KPMG Global
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Italy: Country-by-country reporting approved in 2016 budget law

Italy: Country-by-country reporting approved

Country-by-country reporting requirements are included in the 2016 budget law as approved with amendments (Act n. 2111-B) on 22 December 2015 by the Italian Parliament.


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The 2016 budget law (Disposizioni per la formazione del bilancio annual e pluriennale dello Stato – Legge di Stabilità 2016) includes—as paragraph 145 of article 1—country-by-country (CbC) annual reporting requirements for multinational entities pursuant to the recommendations made in the OECD’s base erosion and profit shifting (BEPS) project.

Country-by-country reporting requirements

Italy’s CbC reporting rules require multinational entities (MNEs) to report, by country, the amounts of gross profit, taxes paid and accrued, and other indicators of effective economic activities. The actual reporting requirements are expected to be set out in a to-be-issued implementing decree (anticipated to be issued within 90 days of the date of enactment of Italy’s budget law). The future decree is also expected to include details about the CbC due dates, filing instructions, and other procedural terms and conditions.

The CbC reporting requirements apply to the following:

  • Italian tax resident that is the ultimate parent company of an MNE group and that is (1) required to file a group consolidated financial statement; (2) has a consolidated annual turnover for the year prior to the CbC reporting of at least €750 million; and (3) is not controlled by any other entity (other than individual persons)
  • Italian resident company controlled by a foreign company that is required to file group consolidated financial statements in a country that has not implemented CbC reporting, or in an country that does not have a qualifying “competent authority” agreement for the exchange of CbC reports with Italy, or in a country that does not comply with an obligation to exchange CbC reports

KPMG observation

The budget law provisions do not specifically state what is the first year for CbC reporting, but given the reference to the OECD recommendations, tax professionals in Italy believe that the CbC reporting would apply to FY 2016. Accordingly, MNEs would be expected to file their first CbC reports with their income tax returns for 2016 (i.e., filed on 30 September 2017)—this is similar to the Italian rules for preparation of transfer pricing documentation.


Read a December 2015 report [PDF 280 KB] prepared by the KPMG member firm in Italy: Italy starts the implementation of the BEPS action with the CbC reporting

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